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Q: Our company pays medical allowances to staff, say RM45.00 per medical bill. Does this allowance need to be declared in the staff's Form EA?
A: Fixed medical allowances received on a monthly/yearly basis regardless of it being utilised by an employee is a form of perquisite and is chargeable to tax as part of gross income from employment. Thus, it is required to be declared in the Form EA. However, if it is a medical claim reimbursed to the staff but capped at an amount (e.g. RM45 per bill), it will not be taxable hence is not required to be declared in the Form EA of the staff.
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YYC Tax Guru