Employment and Perquisites Overview
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Questions and Answers

Benefits in Kind (BIK) may include items such as cars and __________.

handphone

Wages, salary, and __________ received from employment are subject to Malaysian tax.

commission

Any amount received for loss of __________ is subject to certain exemptions.

employment

Value of living accommodation provided by an __________ may be subject to taxation.

<p>employer</p> Signup and view all the answers

A pension or provident fund that is __________ is considered for taxation purposes.

<p>unapproved</p> Signup and view all the answers

Perquisites are defined as additional benefits provided by an employer, including __________.

<p>bonuses</p> Signup and view all the answers

Rules for non-taxable benefits often include certain __________ provided by the employer.

<p>exemptions</p> Signup and view all the answers

Employment income is regarded as derived from __________ when the employee is resident in Malaysia.

<p>Malaysia</p> Signup and view all the answers

Gross income from employment includes any amount equivalent to the ______ provided to the employee.

<p>BIK</p> Signup and view all the answers

BIKs are benefits not convertible into ______, even though they have monetary value.

<p>money</p> Signup and view all the answers

The phrase not convertible into money means that the benefit cannot be ______, assigned or exchanged for cash.

<p>sold</p> Signup and view all the answers

Examples of exempt BIKs include dental benefit, child-care benefit, and free ______ provided by the employer.

<p>transportation</p> Signup and view all the answers

Accommodation provided to an employee is covered under paragraph 13(1)(______) of the ITA.

<p>c</p> Signup and view all the answers

Tax exemption does not apply if the employee has ______ over his employer.

<p>control</p> Signup and view all the answers

The power of an employee to control a company is through holding shares or possession of ______ power.

<p>voting</p> Signup and view all the answers

In the context of company affairs, they must be conducted in accordance with the ______ of the employee.

<p>wish</p> Signup and view all the answers

For a partnership, the employee is a partner of the ______.

<p>employer</p> Signup and view all the answers

For a sole proprietor, the employee and the employer is the same ______.

<p>person</p> Signup and view all the answers

Perquisites are benefits in cash or in kind which are convertible into ______.

<p>money</p> Signup and view all the answers

Perquisites can be received regularly or ______.

<p>casually</p> Signup and view all the answers

A perquisite is subject to tax only if it arises in respect of having or ______ an employment.

<p>exercising</p> Signup and view all the answers

Chargeable income affects what tax rate will be charged with, which can ultimately help reduce the amount of ______ have to pay.

<p>tax</p> Signup and view all the answers

Items received in kind must have money's worth and are ______ into money.

<p>convertible</p> Signup and view all the answers

Personal tax relief allows individual tax payer to reduce chargeable ______.

<p>income</p> Signup and view all the answers

Study Notes

Employment Relationships

  • In a partnership, the employee acts as a partner to the employer.
  • A sole proprietor operates with the employee being the same as the employer.

Perquisites Overview

  • Perquisites (perks) are benefits received by employees either in cash or kind.
  • Subject to taxation under paragraph 4(b) of the Income Tax Act (ITA) as part of gross income from employment.
  • Perks include any items that can be converted into cash or have monetary value.
  • Can be received regularly or casually.

Personal Tax Relief, Deductions, and Rebates

  • Allow individuals to lower their chargeable income, directly influencing tax rates.
  • Reducing chargeable income can ultimately decrease tax liabilities.

Personal Reliefs for YA2023

  • Specific guidelines are available for claiming personal reliefs in the Year of Assessment 2023.

Benefits-in-Kind (BIKs)

  • BIKs are non-cash benefits provided by employers to employees.
  • They are included in gross income from employment under paragraph 13(1)(b) of the ITA.
  • BIKs cannot be converted into cash; their value cannot be sold or exchanged.

Tax Exemption for BIKs

  • Certain BIKs are exempt from tax, such as:
    • Dental benefits.
    • Childcare benefits, including centers provided by employers.
    • Free food and drinks.
    • Free transportation to/from work.
  • Accommodation benefits are regulated under paragraph 13(1)(c) of the ITA.

Tax Exemption Limitations

  • Tax exemption on BIKs does not apply if employees hold control over their employers, usually through shareholding or voting power.

Derivation of Employment Income

  • Employment income is taxed in Malaysia if:
    • The employee works as a director or under paid leave in Malaysia.
    • Duties are performed outside Malaysia but are incidental to employment in Malaysia.
    • Employee works on board an aircraft or ship operated by a Malaysian resident.

Components of Employment Income

  • Includes wages, salaries, bonuses, commissions, and gratuities.
  • Covers value of living accommodation (VOLA) provided by the employer.
  • Involves benefits in-kind like cars or mobile phones received from the employer.
  • Also encompasses amounts from pensions or provident funds that are unapproved.

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Related Documents

Income Tax Act 1967 PDF

Description

This quiz covers the distinctions between partnerships and sole proprietorships in the context of employee-employer relationships. It also explores the concept of perquisites, highlighting their taxable nature per the Income Tax Act. Test your understanding of these important employment concepts.

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