Income Tax (Exemption) Order 2009

Income Tax (Exemption) Order 2009

In exercise of the powers conferred by paragraph 127(3)(b) of the Income Tax Act 1967 [Act 53], the Minister makes the following order:

Citation and commencement

1. (1) This order may be cited as the Income Tax (Exemption) Order 2009.

(2) This Order shall have effect from the year of assessment 2008 and subsequent years of assessment except for subsubparagraph 2(3)(a).

(3) Subsubparagraph 2(3)(a) shall have effect from the year of assessment 2008 until the year of assessment 2010.

Exemption

2. (1) The Minister exempts an employee from the payment of income tax in relation to the benefit or gift specified in the Schedule which is received by such employee from his employer in ascertaining gross income from his employment in the basis period for a year of assessment.

(2) The benefit and gift referred to in subparagraph (1) shall be such benefit and gift that are generally provided to all employees.

(3) The exemption granted to an employee under subparagraph (1) for the following benefit shall be subject to the limits as specified:

(a) the travelling allowance, petrol card, petrol allowance or any of its combination, for travelling to and from home to the place of work shall not exceed RM2,400.00 per year;

(b) the travelling allowance, petrol card, petrol allowance or toll payment or any of its combination, for travelling in the performance of employment at a place other than his place of work, shall not exceed RM6,000.00 per year;

(c) the child care allowance shall not exceed RM2,400.00 per year;

(d) the discounted price for consumable business products of the employer shall not exceed RM1,000.00 per year; and

(e) the amount of subsidy on interest of housing, education or car loan shall be determined in accordance with the following formula:

A X B
C

A difference between the amount of interest to be borne by the employee and the amount of interest payable by the employee in a basis period for a year of assessment;

B the total aggregate of balance of the principal amount of the housing, education or car loan taken by the employee in a basis period for a year of assessment or RM300,000.00, whichever is the lower; and

C the total aggregate of the principal amount of the housing, education or car loan taken by the employee.

(4) Nothing in subparagraph (1) shall absolve or be deemed to have absolved the employee from complying with any requirement to submit any return or statement or statement of accounts or to furnish any other information under the provisions of the Act.

Non-application

3. This Order shall not apply to an employee where the employee has control over his employer in the following manner:

(a) where his employer is a company, the employee has the power to secure that the affairs of the company or any other company that has control over his employer are conducted in accordance with the wish of the employee in the following manner:

(i) by means of the holding of shares in the company or such other company;.

(ii) the possession of voting power in relation to the company or such other company; or

(iii) by means of any power conferred by the articles of association or other document regulating the company or such other company;

(b) where the employee is the employer’s partner in a partnership; or

(c) where the employee is a sole proprietor, the employee and employer is the same person.

SCHEDULE

Benefit

Travelling allowance, petrol card and petrol allowance

Toll payment

Parking rate and parking allowance

Meal allowance

Child care allowance

Payment for traditional medicine and maternity expenses

Discounted price for consumable business products of the employer

Discounted price for services provided by the business of the employer and for the benefit of the employee, spouse and child of the employee

Monthly bill for subscription of broadband, fixed line telephone, mobile phone and pager registered under the name of employee or employer

Subsidy of interest of housing, education and car loan

Gift

Pager

Personal digital assistant

Telephone

Mobile phone


Made 6 April 2009

[Perb. CR(8.09)294/6/4-9 (Sj. 9)(2009)(Sk. 7); LHDN 01/35/(S)/42/51/231-17.10; PN(PU2)80/LVI]

Tan Sri Nor Md bin Yakcop
Second Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 127(4) of the Income Tax Act 1967]