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Panel Discussion Circular by Royal Customs Malaysia

Business Expenses Claim by Employee

Claiming input tax on business expenses billed to employees. Below are expenses usually billed to employees and not to the businesses, can the businesses claim the input tax and how?
a) Car park and other traveling expenses incurred while visiting customers or on working trips;
b) Mobile phone bill expenses for making business calls on a line registered in their own name;
c) Entertainment meals with existing customers;
d) Hotel accommodation while on outstation business trip;

Decision by Customs:

i) A registered person claiming input tax must hold a valid document (tax invoice) under his name which is required to be provided under section 33 GSTA (Goods and Service Tax Act 2014) (refer section 33 GSTA and reg.38(1)(a)(i) GSTR).
ii) Invoice under employees name cannot be used for claiming input tax EXCEPT for mobile phone bill expenses used for business purpose.
iii) A registered person can use the mobile phone invoice billed to his employee for claiming input tax as long as the expenses are reimbursed and accounted as business expenses.

Taxable Supply - Zero Rated 0%

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Exempt Supply 0%

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Panel Decision Compilation by Royal Customs Department of Malaysia

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