Melissa Chua asked 2 years ago
Dear KC,
I would like to ask some questions pertaining to home leave. We have an expat who is entitled for overseas home leave passage once a year. The company helps to book the air fare for him, his spouse and 2 children on annual basis.
Question 1:
i) According to your seminar on youtube, usually no requirement to declare in EA if employee claims within the limit per annum or fulfill the leave passage taxable exemption allowance conditions. If the company books the airfare on behalf on employee and family, and it costs RM6000 in total, does this mean employee is exempted from tax RM3000 and another RM3000 must be declared under taxable income in EA form? If yes, which sections of the EA form we should declare under? Is it Part B and Part F, and in Part B which sub category?
ii) Does travel insurance, baggage allowance, service charges, levy, airport tax fees as well as anything spent extra such as top up baggage allowance, cancellation & rebooking of flights as well as flight postponement and surcharge included in the calculation of air fare and hence leave passage, regardless local or overseas?
Thanks for your help in advance
KCLau Staff answered 2 years ago
Dear Melissa,
Thank you for reaching out with your questions regarding the home leave passage for expatriates and how it’s treated in terms of taxation, as per your understanding from one of my seminars. It’s great to see your diligence in wanting to ensure everything is handled correctly for the benefit of your employees.
Regarding your specific questions, I must clarify that while I aim to provide valuable financial insights through my seminars and content, I’m not a certified tax professional. The nuances of taxation, especially those that pertain to specific benefits like home leave passage, require expertise that only a qualified tax advisor or consultant would possess. They are equipped to provide advice based on the latest tax laws and regulations, ensuring compliance and optimizing tax obligations.
For the detailed inquiries you’ve raised:
1. The treatment of the cost of airfare booked by the company on behalf of the employee and their family for tax purposes.
2. The inclusion of additional expenses like travel insurance, baggage allowance, and other related fees in the taxable income.
Given the complexity of these matters and their implications for both the employee’s and the company’s tax liabilities, it would be most prudent to consult directly with a tax professional. They can offer guidance tailored to your specific circumstances, ensuring that any declarations made in the EA form are accurate and in compliance with the current tax regulations in Malaysia.
A tax professional can also advise on which sections of the EA form these benefits should be declared under and how to account for any additional expenses related to the leave passage.
While I wish I could provide the specific answers you’re seeking, my priority is to ensure you receive the most accurate and legally sound advice. Therefore, I highly recommend reaching out to a tax advisor or consultant who specializes in employment benefits and expatriate taxation.
Thank you for understanding, and I appreciate your proactive approach to handling your company’s tax matters responsibly. Should you have any general financial questions or need guidance in other areas where I might be of assistance, please feel free to get in touch.
Best regards,
KCLau