The TAX impact on my company pay/subsidy my family trip

𝐓𝐡𝐞 𝐭𝐚𝐱 𝐢𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐦𝐲 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐩𝐚𝐲/𝐬𝐮𝐛𝐬𝐢𝐝𝐲 𝐦𝐲 𝐟𝐚𝐦𝐢𝐥𝐲 𝐭𝐫𝐢𝐩

Question 1:

𝐈𝐬 𝐭𝐡𝐞 𝐥𝐞𝐚𝐯𝐞 𝐩𝐚𝐬𝐬𝐚𝐠𝐞 𝐛𝐞𝐧𝐞𝐟𝐢𝐭 𝐭𝐚𝐱𝐚𝐛𝐥𝐞 𝐮𝐧𝐝𝐞𝐫 𝐦𝐲 𝐞𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐢𝐧𝐜𝐨𝐦𝐞?

Public Ruling 11/2019, the exemption of leave passage is only applicable when provided to the employee and members of his immediate family.

The exemption of leave passage as below:-

a) Leave passage in Malaysia less than 3 times in one calendar year, or

b) Overseas leave passage of not more than once in any calendar year limited to a maximum RM3,000

Public Ruling 1/2003,

Paragraph 8, the benefit of leave passage is not assessable as an employment income which fulfilled the condition under

Paragraph 8.2.7 Public Ruling 11/2019.

Paragraph 9, leave passage benefit received by the employee from the employer, which are not fall within paragraph 8 above is subject to tax under paragraph 13(1)(b) of the Act as gains or profits from an employment.

Paragraph 11 and 12 of Public Ruling 1/2003, leave passage benefit where provided to partners or sole proprietors will not qualify for tax exemption. The expenditure incurred on leave passage cost for the partner or the sole proprietor are not allowed for deduction which considered as personal usage under paragraph 39 of ITA 1967.

So, there is no part of the expenditure claimed is allowed when computing the partner's income and the sole proprietor's adjusted income of his business.

𝐄𝐱𝐩𝐞𝐧𝐝𝐢𝐭𝐮𝐫𝐞 𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐭𝐨 𝐥𝐞𝐚𝐯𝐞 𝐩𝐚𝐬𝐬𝐚𝐠𝐞 𝐝𝐞𝐝𝐮𝐜𝐭𝐢𝐛𝐥𝐞 𝐟𝐨𝐫 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐞𝐱𝐩𝐞𝐧𝐬𝐞𝐬?

Paragraph 7.8 of Public Ruling 4/2015, the expenditure for leave passage benefit which is wholly and exclusively incurred in the production of gross income under subsection 33(1) of the ITA provided by an employer to its employees to facilitate a yearly event within Malaysia which involves the employer, employees and immediate family members of the employees are falls under provisos (i) to paragraph 39(1)(l) of the ITA are 100% allowed for deduction.

Paragraph 10.3 of Public Ruling 1/2003, the leave passage cost given by the employer to the employee includes cost of food, accommodation or other incidental expenses are wholly allowed for deduction but the amount relating to fares (air flight) is treated as leave passage cost under paragraph 10.2 of the Public Ruling 1/2003.

Visit us www.ktp.com.my