As long as the Company is declaring taxable dividend, you must declare your dividend income at gross. However, you are entitled to a Section 110 rebate. If your effective tax rate is higher than corporate tax rate, you have to top it up, if lower, you get a refund.

EPF deduction is on the amount that you've contributed to EPF every month. Refer to your EA form for details.

No.

This is call looking for trouble.

To the best of my knowledge, there is no exemption on incentive given. Can I know specifcally where you get the RM2k exemption from? Your incentive of is taxable in full in my books.

The exemption on allowance is a concession by the IRB supposingly to reduce the admin burden on tracking the allowance. This is to say, specifically, as an example, you're given travelling allowance of RM2k for you to travel from home to office. This entire amount will be exempted in full. If you're given RM5k, RM2.6k will be taxable (RM5k - RM2.4k) since exemption is only up to RM2.4k. Not required to keep any documentation. You're given RM10k on travelling for your official duties, RM4k will be taxable (RM10k - RM6k) since exemption is only up to RM6k. Not required to keep any documentation. It is assumed that the travelling allowance eventhough given to you for your official duties is actually not fully utilised (meaning you didn't use the allowance allocated to you for official duties), henced taxed as part of your remuneration package. However, if you actually incur that whole amount (or any amount above the exemption given i.e above RM6k), you're required to provide documentation as proof and in order for you claim an abatement (deduction against the travelling allowance).

As for the rest of the allowance which is fully exempted such as meal, hp, etc. If the company has all along provide such allowance and there is no significant increase in such allowance, the amount would be exempted in full. No documentation is required to be kept. General rule is that documentation are required to be kept only if you will like to claim a deduction/abatement.

As for the HR messing up your EA form which is very likely, you can choose to disregard the EA form and compute your tax. However, chances of you to get audited will be high and you have to be able to explain your computation. You should be ok if you have all your pay slip supporting your case.

I hope I'm actually answering your question.

Full medical examination, note that it has to be full and nothing else as mentioned by others. You will need the receipt.

To my knowledge, there is no exemption on stock options exercise. However, the method of computation has changed but that was quite sometime ago.

I don't think that the EA form can be amended any longer as Form E would have been filed. Any amendment on EA would very likely cause an error in Form E.

I think the justification on allowance is on the reasonableness. Imagine with the current incentive, the Company provide meal allowance of RM1k and a salary of RM2k whilst previously no such allowance was given. This is a very obvious case of abuse on the tax incentive to avoid tax.

This post has been edited by legiwei: Apr 22 2009, 01:15 AM

I'll try to help out

i) If he is self employed, it will be business income. Being taxed under this category allows a person to deduct all expenses that is incurred against his business income provided the expense is used wholly and exclusively in the production of his gross income. It must not have any personal element in it. No limit as to the expenses he can incurr. But it doesn't make sense to spend more than what you can earn. All claims must be with a receipt, otherwise you risk getting penalise in event of a field audit.

a) Yes, it must be converted into RM. If he uses RM to buy a TT, use that actual cost. If he uses a foreign account to pay off the the expense (USD pay USD), convert using spot rate on the date of purchase.

ii) Your claim must be substantiated. The premium must be paid at 2008 in order for you to claim a deduction. I don't think the actual amount paid is fixed as there is always a discount on it, more as the years go by. So, I don't think you can use the prev year figures.

You will have to look at the terms of the contract. However, from my interpretation, he seems to be more of an employee. Does he have a EA? Just a guide, the word "employee" is defined in the act as :

“Employee” in relation to an employment means -
a. the servant, where the relationship of master and servant subsists;
b. where the relationship of master and servant does not subsist, the holder of the appointment or office which constitutes the employment.

If he is a contracted employee, he is not allowed to deduct any of his direct expenses.

With regards to the insurance premium, as mentioned, all claims must be substantiated. You must have supportings/documentation for your claims. Even if the premium is the same but you couild not prove that you've incur such expenses, your claim could be disallowed. (at the discretion of the tax officer) If both EPF + life ins premiun > RM6k, claim RM6k as it is the max limit.

Sec 132/133 deals with unilateral and bilateral relief. This deals with situation where you've suffered foreign tax and will be allowed to claim a relief against it (to avoid being taxed twice), only applicable with countries that has a DTA with Malaysia though. However, as foreign income is already exempted, there would be much need of this provision any longer.

This post has been edited by legiwei: Apr 25 2009, 12:30 AM

Your friend is not entitled to those deduction as mentioned by your previous accountant. The scope of deduction for employment income is extremely limited.