so basically IRB will ask you to show the physical gadget that you purchased during audit?

Not just based on original documents only (Receipt)

yes, my wife is a working individual who pays tax as well. The reason why I want to take in the claim on my side is because my tax savings will be higher.

I think I will try to justify to LHDN if necessary that I legitimately bought the laptop which is registered under her name as I want her to be the rightful registered owner of the laptop.

I will also show them that my wife didnt claim that receipt under her tax filing... Fair enough I guess

How long does it take usually to process refund of tax after submitting the assessment?

I submitted on 20th march and still no news on my refund

Yeah, i remembered last year was quite fast for LHDN to process the refund.

Thats why i was just wondering hahaha

One questions about buy-outs from companies.

Lets say company A(NEW EMPLOYER) bought me out 2 months salary in lieu from company B (EX EMPLOYER). I paid to Company B on behalf of Company A and claim reimbursement from Company A for the 2 months.

Now, I heard that Company B will declare this reimbursement as my gross income in my EA form / payslip. Which means I need to pay tax on the income that I have not earned (2 months)??

Is that true?

Isn't that already double deduction? Company B (EX EMPLOYER) is the one that has earned the income? and should be taxable for them?

How come the employee still need to pay income tax on the income that he / she has not earned as the money didnt go to them at all.

In my opinion:

Company A can claim 2 months tax deduction on buy-out as a business expense for Corporate Ta.

Company B will need to declare as other income and pay corporate tax on the income received of 2 months.

Employee should not need to fork out any tax payable since no expense was incurred since it is reimbursed & no income earned since it is paid to company.

Please correct me if I am wrong,

This post has been edited by BacktoBasics: Aug 8 2022, 01:05 PM

I did read up the links that you provided to me as I have googled them already.

But Company B (EX Company) never pay me the notice period of 2 months since I never served them. So I paid them to let me go to join the new Company A and claimed reimbursement from them.

So in my position, Net Income & Expense is NIL. But I am told that I need to pay TAX on the 2 months notice as they will declare as GROSS INCOME. I am thinking why I need to pay since I dont earn any income on that 2 months also.

Company B should be the one who pays corporate tax as taxable income right since they received monies from me / Company A

This post has been edited by BacktoBasics: Aug 8 2022, 01:17 PM

I have the receipt from my BANK ACCOUNT Maybank to state the purpose is for salary in lieu notice payment.

I have submitted the said receipt for the new company to reimburse me back for the money I paid on behalf of them.

Now, they will declare it as my gross income for the buy-out payment.

But to my understanding, my net impact is NIL. Why need to pay TAX on INCOME that i didnt even earn in the first place? Net impact is NIL

My previous company got no mistake as they pay me until my last day which is not including the 2 months salary in lieu.

But i am puzzled on how it is my benefit when the salary in lieu payment doesnt even go to my pocket but i need to pay tax on the gross income that I didnt received?

Yeah I know total is 12 months income in a year.

But from Nov - Dec 20, that 2 months, I have paid the previous company and get reimbursement from new company. Net impact is NIL. But how come I still need to pay for the taxes of the 2 months which I didnt even get the income?

haha this is what puzzles me and quite unfair?

Wow, so in directly, what you meant is:

Buy-out is actually at the expense of the employee even though the new company was the one that wants you to join early to help out with the business.

So there is a cost of buy out for the employee which is the tax portion of the buy-out?

I didn't know that I need to pay for the tax of buying out as the company told me that they will select another candidate if I am unable to join them immediately.

But in my own opinion there is no income generated on this transaction on my end because the new company that pays the buy out can claim tax deduction as a business expense whereas the ex company received the income and pays corporate tax on it.

So if you tax the employee again on so called benefits or income. Don't you think it is double taxed?

They say they will declare as a benefit in the EA form. Which also means taxable on the buy out amount lol

I know that is the law but it is unfair as I don't receive any income lol.

How I wish if my situation is equivalent to what you have just described.

Haha my increment is not even 10 percent.

I jumped because the role was interesting. I want to upgrade my skillset.

But at the end seems like an expensive course...

Would it be considered as a double taxation in your opinion?

Thanks for the comments and feedback.

But I think there is no way around this by that looks of it.

I think all I can learn from this lesson is don't be pressured by new company on buy outs because you need to bare the tax portion of that buy out which means there is a switching job cost involved for the employee

Cheers and have a great day everyone