S.

13(1)(b) Benefits and

amenities
Gross

income from an employment

includes benefits or amenities not being
benefits or amenities convertible into
money provided for the employee
Benefits in kind are not convertible into
money when such benefits can neither be
sold, assigned or exchanged for money,
either because of a contract or because of
the nature of the benefit

S.13(1)(b) Benefits and

amenities-cont.
Exemptions

S.13(1)(b)(i)and(ii)
(1) medical and dental benefits
(2) leave passage within Msia not exceeding 3
times in any calendar year or leave passage
between Msia and any place outside Msia not
exceeding one leave passage which is
limited to RM3,000
(3) child care benefits

S.13(1)(b) Benefits and

amenities-cont.
(4) facilities provided in the course of
exercising duties
(5) subsidized food and drinks
(6) free transportation

S.13(1)(b) Benefits and

amenities-cont.
Valuation of benefits:
- rates specified by the IRB
- special valuation provided in the Act
- to be valued on the basis of moneys worth if it
is convertible into money

General guidelines to value benefits in kind

cost of the asset providing benefit
average life span of asset

ann. value
of benefit prescribe

S.13(1)(b) Benefits and

amenities-cont.
In

the case of motor cars provided, the

benefits to be assessed will be the value
of the private use of the car and fuel
provided
In the case of household furnishings,
apparatus, appliances and others, the
formula would differ based on the extent of
households furnishings.

 If

fuel is provided without motorcar, the annual

actual value of fuel provided is treated as benefit
received.

If

driver is provided, the annual value of the benefit

is fixed at RM3,600 (RM300 per month) as well as
gardener. For the domestic servant the limitation is
RM400 per month.

Where

an employer provides motor vehicle to the

employee for both business and private use, the
benefits to be assessed will be based on the value
of the car and fuel provided in accordance to the
table (will be provided).

THE PRESCRIBED VALUE OF MOTORCAR AND ITS RELATED

BENEFITS
Cost of motorcar (New) Annual value of Fuel per annum
private usage of car

RM RM
Up to 50,000
50,001-75,000
75,001-100,000
100,001-150,000
150,001-200,000
200,001-250,000
250,001-350,000
350,001-500,000

1,200
2,400
3,600
5,000
7,000
9,000
15,000
21,250

600
900
1,200
1,500
1,800
2,100
2,400
2,700

500,001 and above 25,000 3,000

 The

amount of the annual value of the taxable

benefit would be reduced by half in the event the
age of the car provided to the employee exceeded
5 years. The value of the fuel remains unchanged.

For

mobile phone provided, the benefit will be

assessed for RM600 per annum (RM50 per
month) if the employer pays for the rental of the
phone and all business calls; and the employee
owns the mobile phone.

S.13(1)(b) Benefits and

amenities-cont.
Eg:

In the basis year 2002, Mr Hakim received

salary of RM2,000/month. His employer provides
him a car with the value of RM4,000/year and
gardeners allowances of RM200/mth. The
employer grants him 3 domestic leave passages
which amounting to RM700, RM1,000 and
RM800. Apart from that he is also entitled for
medical benefit for himself of RM500 and the
family members amounting to RM800. A quarter
of the car provided was used for personal
matters.

S.13(1)(b) Benefits and

amenities-cont.
S.13(1)(a)

Salary
Gardener allowances
S.13(1)(b)
leave passage
medical treatment
motorcar provided
Total employment income

RM24,000
RM 2,400
RM26,400
exempted
exempted
RM 1,000
RM27,400

Section 13(1)(c)

S.13(1)(c)-Accommodation
An

accommodation provided by the

employer is taxable
Rent free and situated in Malaysia
For living purposes during his employment
S.13(1)(4) living accommodation provided
only for spouse, servants, dependants or
guests

S.13(1)(c)-Accommodation
Value

of the accommodation
lower of 30% from employment income S.13(1)
(a)or defined value of an accommodation
Eg. Mr A is currently employed by AAA Sdn Bhd.
His salary is RM5,000/month. He is provided
with an accommodation by his employer
beginning from January 1 2001 till 31 December
2001. The employer rented the house at the rate
of RM2,000/month (including furniture
amounting to RM140)

S.13(1)(c)-Accommodation
Employment

income:

S.13(1)(a)

Salary (5,000x12)
S.13(1)(b)
Furniture (140x12)
S.13(1)(c)
Value of the accommodation
30%x60,000 or (1,860x12)

RM60,000
RM 1,680

RM18,000

S.13(1)(c)-Accommodation
Where

living accommodation is provided

in a hostel, hotel or similar premises or
any premises on a plantation or in a forest,
or where the premises is in an area not
subject to public rates, the gross amount
of employment would be the 3% of the
gross income under S.13(1)(a) S.32(2)
(b)

S.13(1)(c)-Accommodation
Where

accommodation is provided only

for part of a relevant period, the amount to
be included in the gross income is
reduced proportionately as is just and
reasonable S.32(3)(b)
No adjustment can be made if the
accommodation is too large or the
accommodation is shared with other
employees.

S.13(1)(c)-Accommodation
Deduction

of expense S.38(1)(b)
A taxpayer who is provided with
accommodation within the meaning of
S.13(1)(c) can deduct from the gross
income from employment, expenditure of
the nature of public rates, insurance, rent
payable by him in respect of
accommodation provided.

S.13(1)(c)-Accommodation
Directors

of controlled companies
S.32(3)(a), a director of a controlled company is
assessed on the defined value of the
accommodation. There is no comparison with
the 30% of the employment income under
S.13(1)(a). However, if the accommodation is
shared, the defined value would be adjusted
proportionately which is just and reasonable.

S.13(1)(c)-Accommodation

Living accommodation provided by the statutory bodies

free of charge or at the minimum rate, the defined value
of accommodation is 3% of the employment income
S.13(1)(a)
If the accommodation is owned by the statutory bodies
and being rented by employees who pays an economic
rent, then the defined value of the premises will not be
assessed.
If accommodation provided by statutory bodies but no
rent paid/minimum rent, the defined value would be 3%
of s.13(1)(a)

Section 13(1)(d)

Pension and Provident FundS.13(1)(d)

Receipts

from a pension or provident fund not

approved by the DG would be a subject of
taxation whether the receipts were paid before
or after cessation of employment
Eg. Mr Z was employed by Chemical Sdn Bhd
since 1994. His salary was RM1,000/month out
of which he contributed RM100 per month to a
provident fund not approved by the DG. The
employers contribution to the fund is also
RM100/month.

Pension and Provident FundS.13(1)(d)

On

31/12/97 Mr Z retired and withdrew

both his employers share totaling
RM29,000. Mr Z would be assessable for
Y/A 1998 on a sum of RM14,500. The
other half relating to his contribution being
tax already over the years.

Section 13(1)(e)

Compensation for loss of

employment-S.13(1)(e)
Covers

any amount paid to an employee before

or after the cessation of employment and
includes
1. Salary or wages in lieu of notice
2. Compensation for breach of contract
3. A payment to obtain release from a contingent
liability under a contract of service
4. Ex gratia or contractual payments such as
redundancy, retrenchment payments, severance
pay

Compensation for loss of

employment-S.13(1)(e)
Exemption

Para 15 Sch 6
Full exemption if employment terminated due to
ill-health
Partially exempted to director of controlled
companies for an amount of RM4,000 for every
completed year of service
2003 Budget: Exemption of RM4,000 is
increased to RM6,000 (w.e.f. 2003)

Basis Period
The

basis year in respect of employment

is also the basis period for the year of
assessment. The basis year 1.1.200131.12.2001 is also the basis period for
Y/A2001 in respect of employment income

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