With effect from 2009, employers are given the option to make adjustments to reduce their employees' monthly tax deductions.A statement issued by the Inland Revenue Board Malaysia (LHDNM) on 9 January 2009 said these adjustments can be made by taking into account the allowances, perquisites and benefits-in-kind which have been exempted from tax including those announced in Budget 2009.
Prior to this new ruling, employers only make EPF, Socso and income tax deductions from the gross salaries of their employees every month.
With the adjustments, allowances for the employees such as petrol and food allowances and perquisites can be included in the tax deductions, meaning employees would be paying lesser tax for the year.
For further inquiries and assistance, contact LHDN at 1-300-88-3010 or logon its website at
http://www.hasil.gov.my .
Tax Deductions Announced in Budget 2009
(1) Petrol card, petrol allowance, or travel allowance between the home and workplace (until Year Assessment 2010 only, claimable up to RM 2,400 / year).
(2) Petrol card, petrol allowance, or travel allowance and toll card for official duties (claimable up to RM 6,000 / year).
(3) Allowance or fees for parking.
(4) Meal allowance.
(5) Allowance for subsidies for child care (claimable up to RM 2,400 / year).
(6) Medical benefits (including maternity expenses and traditional medicines such as ayurvedic and acupuncture) or dental.
(7) Employers' own goods provide free or at a discounted value (claimable up to RM 1,000 / year).
(8) Employers' own services provide free or at a discount provided such benefits are not transferable.
(9) Telephone, mobile phone, pager and Personal Data Assistant (PDA).
(10) Bills for Telephone, mobile phone, pager and PDA registered in the name of employee or employer.
(11) Gift of new personal computer (until Year Assessment 2010 only).
(12) Monthly broadband subscription fee (registered in the name of the employer) from the employer (until Year Assessment 2010 only).
(13) Perquisites (whether in money or otherwise) provided to the employee pursuant to his employment in respect of :
(a) past achievement award;
(b) service excellence award, innovation award, productivity award;
(c) long service award (provided that the employee has exercised an employment for more than 10 years with the same employer).
(Claimable up to RM 2,000 / year)
(14) Leave passages (only applicable to employee and immediate family)
(a) With in Malaysia (including food and accommodation) not exceeding three times a year (claimable up to RM 3,000 / year);
(b) Outside Malaysia (once a year - limited to RM 3,000).
(15) Compulsory insurance premium paid for foreign employees in lieu of SOCSO payment.
(16) Group insurance premium to protect the employees in the event of accident.
(17) Interest subsidies for loans up to RM 300,000 in respect of housing, motor vehicle and educational loans. Exemption is given in existing loans and new loans.
