TAX QUESTIONS? YOU ASK LAH!

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Q: I am entitled to a yearly local leave passage benefit of RM5,000 according to the terms of my employment agreement. I went on four local holiday trips with my wife and claimed a local leave passage cost of RM500 for each trip. Is this benefit subject to income tax? 

A: Generally, leave passage benefit is a perquisite and is subject to income tax. However, you will be exempted from tax for up to three local leave passages per year, regardless of the amount. As such, you will be exempted from tax for only 3 trips (RM500 × 3 trips = RM1,500). The fourth local leave passage cost of RM500 will be subject to tax. 

Wishing you plentiful tax savings!

Zen Chow

YYC Tax Guru

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