GST System Changes Newsletter

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GST Accounting on Employee Benefits

Further Update: DG's Decision and DG8/2015

**Latest Update on DG's Decision Analysis. Please download the attached file.

In addition to the previous newsletter on the amendment on DG's Decision on October 30, 2015, DG of Royal Malaysian Customs released the latest DG8/2015 on November 2, 2015. Please click the link DG8/2015 to download from RMCD-GST portal.

Additional highlights from amendment on 01/2014 for Item 3 Bad Debt Relief as below:

  1. If the bad debt relief is not claimed by the supplier in the immediate taxable period immediately after the expiry of the sixth month, then the taxable person has to notify the Director General (DG) within 30 days after the expiry of the sixth month on his intention to claim at a later date
  2. A GST registered person who has made the input tax claim but fails to pay his supplier within six months from the date of supply shall account for output tax immediately after the expiry of the sixth month
  3. Date of Supply = Date of Tax Invoice issued by your vendor, not the posting date or claim date

DG8/2015 has the following highlights on employee benefits and practice of holding tax invoice.

  1. Supply of accommodation and furniture for employees
    • Residential accommodation is exempt supply, therefore it is not entitled to claim input tax credit incurred on the acquisition of residential accommodation
    • It must state in employment contract to provide FOC to qualify as employee benefits. Then it is not required to account for output tax as deemed supply.
    • Supply of furniture is subject to GST and it has to acount for output tax as deemed supply.
    • Supply of furniture to family members of employee whether or not for consideration is subject to GST, it is block and not entitled for input tax credit
  2. Occupation and safety equipment given to staff
    • The equipment that is provided FOC must state in employment contract to qualify as employee benefits
    • The equipment that transfer the ownership to the staff will subject to gift rule
    • The equipment that will return to the business will not account for GST
  3. Practice of holding tax invoice
    • The date or time of posting the tax invoice into company accounts payable module
    • One year from the date that he holds tax invoice
Attachments:
Download this file (DG Decision Summary-02112015.pdf)DG Decision Summary[Latest DG's Decision]124 kB

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GST System Changes