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Amendment to flexible work arrangement benefits
As highlighted in an earlier tax alert, the following Order and Rules were gazetted on 26 January 2021. The Order and Rules stated that they were effective for the year of assessment (YA) 2020 (see Tax Alert No. 3/2021).
- Income Tax (Exemption) Order 2021 [P.U.(A) 30]
The Order provides that in ascertaining the gross income from employment for a YA, an employee is exempted from the payment of income tax on the value of benefit (in the form of a smartphone, tablet or personal computer) received from his employer. The value of benefit that can be claimed for tax purposes is capped at RM5,000. - Income Tax (Deduction for Value of Benefit given to Employees) Rules 2021 [P.U.(A) 31]
The Rules provide that in ascertaining the adjusted income of a Malaysian resident from his business for a YA, a deduction shall be allowed for the value of benefit (for the purchase of a smartphone, tablet or personal computer) given to his employee.
Following the above, the Amendment Order and Amendment Rules outlined below were gazetted on 25 March 2021 to stipulate that the Order and Rules will be effective from YA 2020 instead of for only YA 2020:
- Income Tax (Deduction for Value of Benefit given to Employees) (Amendment) Rules 2021 [P.U.(A) 133]
- Income Tax (Exemption) 2021 (Amendment) Order 2021 [P.U.(A) 134]