Is director’s medical expense tax-deductible in Malaysia?
In general, medical fee for the employee is tax-deductible under S 33 of the Income Tax Act 1967.
Public Ruling No. 11/2019 - Benefits In Kinds.
Under section 13(1) b Income Tax 1967, medical and dental benefits are exempted from income tax for employees
Under paragraph 8.3.1 , if the employee receiving BIK from the employer has control over his employer (company) there is no exemption on the medical fee on the director in control company.
What is control?
For a company, the power of an employee to control is through :
The holding of shares or
The possession of voting power in or
By virtue of powers conferred by the articles of association or another document.
Question on tax deductibility
So what is your tax position ondirector’s medical fee (allowable vs not-allowable expenditure) in Sdn Bhd (controlled company)?
If the medical fee on the director is BIK and PCB is deducted accordingly on the director’s remuneration. Or
If medical fee is DEEMED as tax exempted BIK !
What is your tax position on this taxing issue?
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Published : 26-Apr-2022