b. Gardeners / Drivers / Domestic Servants

  1. If the gardener/driver/domestic servant is engaged and is paid by the employee who then claims reimbursement from the employer, the amount reimbursed by the employer will be subject to tax under Section 13(1)(a) of the Income Tax Act, 1967.

  2. In cases where the driver is not specifically allocated to the employee but is taken from the employer's pool of drivers for business travel only, the BIK value will not be imposed on the employee concerned.

  3. If the domestic servant is provided by the employer for business reasons (e.g. the employee is required to entertain clients at his residence), the BIK value of RM4,800 will be assessed on the employee but the employee can make a claim to reduce the amount stated. Consideration will be given in accordance with the facts of each case.

  4. The BIK value in accordance with the Income Tax Ruling 1997/2 that has been fixed is for each gardener/driver/domestic servant
   
 

c. Loan Interest

i. Interest-free loan

  1. If the employer takes a loan from a third party to provide an interest-free loan to the employee, the value of the BIK to be assessed on the employee will be the cost paid by the employer to the third party for the loan.

  2. BIK will not arise if the employer does not bear any cost when providing an interest-free loan to the employee. For example, interest-free loan taken from surplus funds of the business without having to borrow from any other party.

ii. Subsidised interest/interest below the market rate

  1. In cases where the employer obtains a loan from a third party to provide a loan to the employee who pays part of the interest while the balance of the interest is borne by the employer, the BIK value imposed on the employee is the interest difference paid by the borrower and that paid by the employee.



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