What is the minimum retirement age for employees effective from 1.7.2013?
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Increased from 55 to 60 years.
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What is the minimum retirement age for employees effective from 1.7.2013?
Increased from 55 to 60 years.
What age did Zubir retire?
60 years.
When was the Gratuity Public Ruling published?
23 November 2016.
What is the tax treatment of gratuity according to the ITA?
Gratuity is included in the gross income from employment and taxed in the year it is received.
Are sums received by way of death gratuities taxable?
No, they are tax exempt according to paragraph 14 of Schedule 6 of the ITA.
Which law provisions are relevant to this Public Ruling?
Sections 7, 13, 25, subsection 83(3), 150, paragraphs 14, 25, 25A, 25B, 25D, and 30A of Schedule 6 of the Income Tax Act 1967.
Who is the Public Ruling intended for?
The public and officers of the Inland Revenue Board of Malaysia.
What qualifies an employee for full exemption on gratuity payment upon retirement?
Retirement due to ill-health, as per the Minimum Retirement Age Act 2012.
What was Aiman's situation that led to his early retirement?
He suffered a heart attack and was diagnosed with serious heart disease.
What is the retirement gratuity received by Fasha after 9 years of service?
RM100,000.
What portion of the lump sum payment from the AA Retirement Benefit Scheme is taxable?
Only the employer's contribution is taxable under paragraph 13(1)(d) of the ITA.
What is the amount of Selva's gratuity payment?
RM150,000.
What document was amended and updated according to the ruling?
PR No. 8/2013.
What amount of Joshua's gratuity will be taxed in the year of receipt?
RM114,000.
What influences the apportionment between gratuity and compensation?
The circumstances of each case and the employer’s normal practice.
How long did Soo work with the same employer?
20 years.
What was the reason for Donald's retrenchment from Sam Electronics Sdn Bhd?
A merger exercise that resulted in his post being declared redundant.
What is the title of the document published by the Inland Revenue Board of Malaysia?
Gratuity Public Ruling No. 9/2016.
Can professional firms use the Public Ruling for training purposes?
Yes, they are permitted to use it for training purposes only.
What is the objective of the Public Ruling No. 9/2016?
To explain the method used to characterize lump sum payments received by employees upon termination of employment as gratuity and the tax treatment of gratuity.
How long must an employee work with the same employer to qualify for gratuity exemption?
At least 10 years.
Under what condition are retirement benefits not taxable?
They are not taxable if received from a pension or provident fund approved under section 150 of the ITA, according to DGIR conditions.
What gratuity did Rani receive upon retirement?
RM100,000 for 23 years of service.
What happens to gratuity payments if they are credited to the EPF account?
The gratuity accrues as income at the time of payment and is subject to tax.
In the example provided, how much gratuity did Ruben receive?
Ruben received a retirement gratuity of RM190,000.
What is the amount that qualifies for exemption from Ruben's gratuity?
RM16,000 qualifies for exemption based on his 16 years of service.
What happens to gratuity payments when an employee reaches the compulsory retirement age?
No further gratuity is paid.
What is the purpose of the Public Ruling No. 9/2016 by the Inland Revenue Board of Malaysia?
To grant gratuities to employees leaving service and outline the rate or amount of gratuities normally granted.
What is the date of publication for the Inland Revenue Board of Malaysia Gratuity Public Ruling No. 9/2016?
23 November 2016.
What was the duration of Zubir's contract after compulsory retirement?
2 years.
What is the amount that qualifies for exemption from Alias's gratuity received after his 3-year contract?
RM3,000.
What rights are reserved on the Public Ruling?
All rights are owned by the Inland Revenue Board of Malaysia.
What empowers the Director General to make a Public Ruling?
Section 138A of the Income Tax Act 1967.
When is employment income taxed according to the ITA?
In the year the payment is received, regardless of the period it is attributable to.
What age did Chan retire and what amount did he receive as retirement gratuities?
Chan retired at the age of 50 years and received RM108,000.
What happens when an approved retirement scheme loses its approved status under section 150 of the ITA?
All contributions made by the employer must be included in the employee's gross employment income.
What is the tax treatment of gratuity payments credited to the Employees Provident Fund (EPF)?
Gratuity is taxed in the year of receipt as income.
What is the taxable amount of Alias's gratuity payment?
RM197,000.
What age did Rani retire?
55 years.
At what age did Joshua retire?
54 years.
What is the significance of working in the same group of companies for Chan?
It allows him to qualify for gratuity exemption after 10 years of service.
What is the taxable amount of Pritam's retirement gratuity?
RM18,000.
What was Sara's retirement gratuity amount?
RM250,000.
What is the distinction between gratuity and compensation for loss of employment?
Gratuity is a lump sum payment for past service, while compensation is for loss of employment.
What amount of Zubir's gratuity qualifies for exemption?
RM2,000.
What is the taxable amount of Zubir's gratuity payment?
RM18,000.
What will be the taxable amount of Alias's gratuity payment after his 3-year contract?
RM97,000.
What is the title of the Public Ruling issued by the Inland Revenue Board of Malaysia?
Gratuity Public Ruling No. 9/2016.
What is prohibited regarding the reproduction of the Public Ruling?
Systemic or multiple reproduction, distribution for commercial purposes, and modification of content are prohibited.
Can the Director General withdraw a Public Ruling?
Yes, either wholly or in part, by notice of withdrawal or by publishing a new Public Ruling.
What is the age at which Alias received his gratuity payment?
51 years.
What was the outcome for Mike's widow regarding the death gratuity received?
The sum received by Mike's widow as death gratuity is tax exempt.
Are returns on investment from an unapproved scheme included in the employee's gross employment income?
No, returns on investment are not included and should not be subject to tax.
Does the partial exemption apply to employment with other companies in the same group?
No, it only applies to the gratuity attributable to the service with the last company in the group.
How is the balance of gratuity taxed after the partial exemption?
It will be taxed in the year of receipt as provided in subsection 25(1) of the ITA.
What happens to lump sum payments received upon cessation of employment?
They are taxed in the year of receipt.
What types of payments are not eligible for partial exemption?
Payments from unapproved retirement schemes or compensation for loss of employment.
How much of Joshua's retirement gratuity qualifies for partial exemption?
RM6,000.
What was Jamil's retirement gratuity after 16 years and 1 month of service?
RM142,000.
What amount of Soo's retirement gratuity qualifies for partial exemption?
RM20,000.
What amount of Sara's gratuity will be taxed in the year of receipt?
RM246,000.
When is a lump sum payment treated as gratuity?
When it is payment for past services at the end of a specific contract or upon reaching retirement age.
When was the Gratuity Public Ruling No. 9/2016 published?
23 November 2016.
What does 'Employee' refer to in this Public Ruling?
An employee is the servant in a master-servant relationship or the holder of an appointment or office constituting the employment.
What are some reasons an employee's employment may cease?
Retirement, resignation, premature termination of the contract of service, or by mutual agreement.
Are all retirement benefits taxable?
Yes, all retirement benefits including gratuities and pensions are taxable unless specifically exempted under Schedule 6 of the ITA.
What amount qualifies for partial exemption for Alias's gratuity?
RM23,000.
In the example provided, what was the status of the AA Retirement Benefit Scheme?
It was not an approved scheme under section 150 of the ITA.
What is the taxable amount of Fasha's retirement gratuity?
RM91,000.
What was Pritam's retirement gratuity after 4 years and 3 months of service?
RM22,000.
Does Selva qualify for any exemption on his gratuity payment?
No, he does not qualify for any exemption.
What condition may apply to gratuity payments in collective agreements?
Gratuity may be paid to the EPF account instead of directly to the employee.
How much of Jamil's retirement gratuity qualifies for exemption?
RM16,000.
What is the taxable amount of Soo's retirement gratuity?
RM280,000 (RM300,000 less RM20,000).
What was the total lump sum payment received by the employee declared redundant by Jaya Builders Sdn Bhd?
RM50,000.
At what age was Alias asked to retire?
48 years.
Which organization published the Gratuity Public Ruling?
Inland Revenue Board of Malaysia.
How is 'Employer' defined in this Public Ruling?
An employer is the master in a master-servant relationship or the person responsible for paying remuneration to the employee.
What is the definition of 'Employment' according to this Public Ruling?
Employment refers to a relationship of master and servant or any appointment or office for which remuneration is payable.
What is the compulsory retirement age according to the collective agreement?
50 years.
What gratuity did Zubir receive upon retirement?
RM180,000 for 18 years of service.
What can an employer describe a lump sum payment as upon employment cessation?
Compensation for loss of employment, ex-gratia, contractual payment, retrenchment payments, gratuity, etc.
How much gratuity did Aiman receive upon retirement?
RM350,000.
What must be established to determine the tax treatment of a lump sum payment?
The purpose of the lump sum payment.
What can employees do if they face wrongful dismissal?
Make a complaint or claim to the Department of Industrial Relations Malaysia, Industrial Court, Civil Courts, or Labour Court.
What is the taxable amount of Ruben's gratuity after exemption?
The taxable amount is RM174,000 (RM190,000 - RM16,000).
How is Selva's gratuity payment treated for tax purposes?
It is part of Selva’s gross income.
At what age did Sara opt for early retirement?
50 years.
In the example provided, how much gratuity did Jaya Builders Sdn Bhd pay to an employee after 11 years of service?
RM10,000.
How is the RM50,000 payment divided in terms of gratuity and compensation?
RM10,000 as gratuity and RM40,000 as compensation for loss of employment.
How are retrenchment benefits treated if employment is prematurely terminated with the prospect of continuing until retirement?
They are considered compensation for loss of employment.
What does a Public Ruling set out?
The interpretation of the Director General regarding tax law, policy, and applicable procedures.
What is the minimum age for retirement to qualify for gratuity exemption?
55 years.
How long was Alias's employment period with the company?
23 years and 8 months.
When does a lump sum payment from an unapproved scheme accrue as income?
At the date the payment is credited to the employee's EPF account.
What two elements may the amount paid upon termination of employment consist of?
Compensation attributable to loss of employment and gratuity attributable to past services.
What must the employer do before crediting the net lump sum payment to the executive officers' EPF accounts?
Make the necessary tax deductions.
What are the two main remedies determined by the court for wrongful dismissal?
Reinstatement of the dismissed employee and/or monetary compensation.
At what age did Soo decide to opt for early retirement?
54 years old.
How are retirement benefits, including gratuities, typically documented?
In the contract of service or other binding documents between employer and employee.
When did Zubir's employment period for his 2-year contract commence?
1.4.2014.
How much gratuity did Alias receive for his service before the senior management position?
RM120,000.
What is the purpose of the Public Ruling No. 9/2016 by the Inland Revenue Board of Malaysia?
To provide guidance on the application of provisions of the Income Tax Act 1967 regarding gratuity.
What happens to the retirement gratuity if an employee requests it to be credited to their EPF account?
The employer can credit the net amount of gratuity to the EPF account after deducting the tax to be remitted to the DGIR.
What must the DGIR be satisfied with for an employee to qualify for full exemption on gratuity?
That the retirement was due to ill-health.
What exemption is available for gratuity payments effective for the year of assessment 2016?
Exemption of RM1,000 for each completed year of service.
What must employers do before crediting gratuity to an employee's EPF account?
Employers must file Form CP 22A to the Inland Revenue Board of Malaysia and withhold payment until receiving a clearance letter.
What is the retirement gratuity paid to Joshua for his years of service?
RM120,000.
What evidence did Aiman provide to qualify for full exemption on his retirement gratuity?
A medical report and documentary proof of medical treatment received.
What is the compulsory retirement age according to Joshua's collective agreement?
55 years.
What health issues did Soo have regular medical treatment for?
Hypertension, prediabetes, chronic backache, migraine, arthritis, and frozen shoulder.
What determines whether a termination benefit is a gratuity payment or compensation?
The particular circumstances of each case.
What is the taxable amount of Jamil's retirement gratuity?
RM126,000.
Why did Soo not qualify for a full exemption on his retirement gratuity?
He could not prove his retirement was due to ill health and retired before age 55.
What was the amount of gratuity paid to Zubir after completing his contract?
RM20,000.
Did Alias's gratuity of RM120,000 qualify for any exemption?
No, because he retired before the age of 55 years.
How much of Fasha's retirement gratuity qualifies for exemption?
RM9,000.
At what age does Selva receive his gratuity payment?
55 years.
What is the age range for compulsory retirement under a contract or collective agreement to qualify for gratuity?
Between 50 and 55 years.
How much of Pritam's retirement gratuity qualifies for exemption?
RM4,000.
How is the nature of termination payments assessed for income tax exemption?
The characteristics and nature of termination payments prevail over form and labeling.
How much retirement gratuity did Soo receive?
RM300,000.
How much of Sara's gratuity qualifies for partial exemption?
RM4,000.
How much gratuity did Zubir receive after his 2-year contract?
RM20,000.
What happens if a lump sum payment is received due to premature termination of employment?
It is treated as compensation for loss of employment, not gratuity.
