Recommendation on reducing tax

Topics: Tax, Tax deduction, Taxation Pages: 2 (658 words) Published: October 14, 2014
I hope you can comprehend the tax implications and tax efficiency of the remuneration packages. Besides, I would like to recommend the most tax efficient remuneration package based on the proposed benefits by your employer and the legal ways to save tax in Malaysia. First and foremost, it is a good option to ask for a company car because the car given by your employer, Golden Berhad is regarded as benefit-in-kind (BIK). A company car is more beneficial for you (taxpayer) because the predetermined tax scale for cars are much lower than the cost of buying and maintaining a car.

Next, I would l like to persuade you to buy a life insurance for yourself and family members in order to salvage. There is maximum tax relief of RM6, 000 per annum for premium paid for life insurance included your EPF contributions. Additionally, you can pay your parents’ medical bills to claim up to RM5, 000 per individual for payments. You may claim a deduction up to RM 500 per tax year for a full medical examination. There is a separate tax deduction up to RM5000 per year is given for necessary basic supporting equipment for disabilities suffered by yourself, wife, children or parents. There is a new Private Retirement Scheme (PRS) introduced. You may invest on Private Retirement Scheme for exemption of up to RM3, 000 with effect from YA 2012 to 2021. All in all, you can use insurance as a form of savings with protection and returns, and you will get tax exemption at the same time.

Besides that, the living accommodation such as house given by your employer for the whole period of your employment is taxable but you are benefited to use the accommodation without the need to rent a house with high costs. If you wish to get housing loan to purchase your own house there is a maximum deduction of RM10, 000 is for each basis year for a period of three consecutive years of assessment (For Sale and Purchase (S&P) Agreement executed in between 10th March 2009 to 31st December 2010). For the...
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