Important Circular
Dear Value Clients and Associates
INCOME TAX (DEDUCTION FOR EXPENDITURE IN RELATION TO MINIMUM WAGES) RULES 2014 [P.U. (A) 206/2014]
The above Rules are effective for YA 2014 (Gazetted on 14 July 2014).
Further deduction allowed to a qualifying person (in addition to the deduction for payment of wages), on the expenditure incurred to pay minimum wages* to his employees* between the months of January 2014 and December 2014.
* As defined in the Rules.
The expenditure – represents the difference between:
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- the amount of minimum wages paid by a qualifying person to his employee for the month of January 2014; and
- the amount of wages paid by that qualifying person to the same employee for the month of December 2013.
A qualifying person is a Malaysian tax resident, and is:
(a) a SME in the manufacturing sector, which at the end of the basis period for a year of assessment:
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- has not more than two hundred (200) full-time employees; or
- has achieved annual sales of not more than fifty million ringgit (RM50m);
(b) a SME in the services sector and other sectors, which at the end of the basis period for a year of assessment:
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- has not more than seventy five (75) full-time employees; or
- has achieved annual sales of not more than twenty million ringgit (RM20m);
(c) a co-operative society established under the Co-operative Societies Act 1993 [Act 502]; or
(d) a society established under the Societies Act 1966 [Act 335] and resident.
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Note: PDF copy of the above Rules are attached for your kind attention and reference. (The English version is available from Page 5 of the PDF file) The explanatory notes are extracted from technical alerts issued by the Chartered Tax Institute of Taxation Please do not hesitate to contact us should you require clarifications on the above. |
22 July 2014