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Is monthly phone allowance paid into salary subject to income tax?

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gromitmtl

Hi folks,

My company pays monthly phone allowance into salary and deducts income tax. But I read on this link that these are tax exempt:
- Gifts  of  fixed  line  telephone,  mobile  phone,  pager  or Personal  Digital  Assistant(PDA)registered  in  the name of the employee or employer including cost of registration and installation.
- Monthly bills for subscription of broadband, fixed line telephone, mobile phone, pager and PDA registered in the name of the employee or employer including cost of registration and installation.

http://lampiran1.hasil.gov.my/pdf/pdfam … artF_2.pdf

How to understand and read this correctly? Appreciate your input.

Casarodriguez

If you claim it as an expense monthly then you will not have to pay tax.  However if it is paid as an allowance to you monthly then you will have to pay tax on it.  If it doesn't impact your tax amount significantly and you are okay with it then just take it as an allowance monthly.  However if it is increasing your tax payout by a few hundred dollars a year then you may want to submit an expense claim. However each company may have its own way of doing it but for sure you will not have to pay tax if it considered an expense.  Your company accountant will know how to do it but whether they will do it or not is another matter. Good luck.

gromitmtl

Thank you so much for your advice :)

geof01

Hi Casarodriguez,

From your answer here, I understand that expenses submitted as claim to the company are not part of tax chargeable amount.

I have been asked by my company to move to Malaysia and I am now working/living in HK where taxes are way lower.

In order for me to be able reduce the tax chargeable amount to a minimum, I was wondering whether charges such as accommodation and school fees could still be claimed as expenses to the company.

I understand this is also subject to company discretion/policy but since it seems you have experience in it, was seeking for your advice on this
Thanks a lot

paddytimmons

These would generally be given as a living allowance and paid with your monthly salary.... as you say though, it’s at the employers discretion, have a chat with your employer to find out more...

geof01

Thanks a lot for your reply
From my understanding, if it comes as an allowance, this will be counter as taxable income which is what I’m trying to avoid. Will definitely check with my employer but if you have tips on how to decrease total income amount, happy to hear :)

cvco

Can the company take the phone in their name and simply pay the bill each month with their other bills and get their own business deduction?

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