noteTAXATION
ATXB213 MALAYSIAN TAXATION 1
SEMESTER 1 2014 / 2015
TOPIC 3: EMPLOYMENT INCOME (PART A)
Learning Outcomes
At the end of this lecture, students should be able to:
• Discuss the definition of Employment
• Differentiate between employment & business
• Discuss the derivation of employment income S13(2) and S13(3)
• Explain the basis of assessment (Section 25)
DEFINITION OF EMPLOYMENT
1) Employment is defined in Sec 2, ITA 1967 employment in which the relationship of master & servant subsists; any appointment or office, whether public or not & whether or not that relationship subsists, for which remuneration is payable
2) Employee in relation to an employment means where the relationship of master & servant subsists, the servant; where that relationship does not subsist, the holder of the appointment or office which constitutes the employment
3) Employer in relation to an employment means where the relationship of master & servant subsists, the master;
Where that relationship does not subsist, the person who is paying/responsible for paying any remuneration to employee who has the employment.
EMPLOYMENT Vs PROFESSION
1) The issue whether an individual is exercising an employment (contract of service) or is self-employed/profession (contract for service) rest entirely on its own situations.
2) The following principles may serve as a guide as to whether there exist an employment source:
There exists a master & servant relationship;
The master’s right to control the method of doing works;
The master’s right of suspension or dismissal;
The employment is normally a full time job undertaken by the employee himself without substitution of staff (he does not hire helpers);
No financial risk;
Employee enjoy benefits;
Employee uses tools provided by the employer to carry out duties;
The employee’s duties would form part of the business activities.
3) It is important to know differences between employment and
SEMESTER 1 2014 / 2015
TOPIC 3: EMPLOYMENT INCOME (PART A)
Learning Outcomes
At the end of this lecture, students should be able to:
• Discuss the definition of Employment
• Differentiate between employment & business
• Discuss the derivation of employment income S13(2) and S13(3)
• Explain the basis of assessment (Section 25)
DEFINITION OF EMPLOYMENT
1) Employment is defined in Sec 2, ITA 1967 employment in which the relationship of master & servant subsists; any appointment or office, whether public or not & whether or not that relationship subsists, for which remuneration is payable
2) Employee in relation to an employment means where the relationship of master & servant subsists, the servant; where that relationship does not subsist, the holder of the appointment or office which constitutes the employment
3) Employer in relation to an employment means where the relationship of master & servant subsists, the master;
Where that relationship does not subsist, the person who is paying/responsible for paying any remuneration to employee who has the employment.
EMPLOYMENT Vs PROFESSION
1) The issue whether an individual is exercising an employment (contract of service) or is self-employed/profession (contract for service) rest entirely on its own situations.
2) The following principles may serve as a guide as to whether there exist an employment source:
There exists a master & servant relationship;
The master’s right to control the method of doing works;
The master’s right of suspension or dismissal;
The employment is normally a full time job undertaken by the employee himself without substitution of staff (he does not hire helpers);
No financial risk;
Employee enjoy benefits;
Employee uses tools provided by the employer to carry out duties;
The employee’s duties would form part of the business activities.
3) It is important to know differences between employment and