Benefit-in-kind and Perquisites from Employment Part 4 of 4 

eKTP 74

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What issues will be challenge by Inland Revenue Board (IRB) after our last e-KTP 73 regarding the Benefit-in-kind and Perquisites from Employment. So, is this relevant to you as an employer and your business?

Let look at the following expenses that the IRB has authority to disregard or vary transactions.
 

1. Ang Pow
May disallow, if it is not reported as income of employee.


2. Motor vehicle under the name of individual but capitalised on the account of Sdn Bhd
Disallow motor vehicle related expense + capital allowance because under personal name.


3. Per Diem Allowance (PR2/2013)
Disallow on director allowance, if the director is a controlled person, managing Director.                                                           


4. Sub-contractor wages
Disallow expenses, if the:                                                                            

  • Payment made in cash

  • No time recording documents

  • No basis of payment

  • No evidence of receipt by the receipt

  • No contract for wages signed to spell out the job function or work assignment


5. Commission paid to agent/distributor
Disallow if no Form CP58 is issued on commission to others.


6. Advertising and promotion expenses
Disallow if it is incurred:

  • For non-employees / third parties

  • Unapproved donation

  • Sponsorship (not related to business)


7. Entertainment expenses
Disallow if entertainment incurred for non-employees / third parties.


8. Traveling and accommodation expenses

  • Any incurred for non-employees?

  • Any leave passage cost?


9. Payments to non-residents

  • Royalty, interest, services, rental of moveable property

  • Compliance with the relevant withholding tax provisions?

 
Darren Yap