Income Tax : A Savvy Taxpayer

There are not many ways to reduce your tax liabilities as an employee, except to maximise your reliefs and rebates, and to deduct minimal allowable expenses from your income.

Reduction of cash remuneration
Cash allowances like allowances for entertainment, housing, car and petrol is taxable at your tax bracket. You may arrange with your HR department and request for your allowances to be on a reimbursable basis.

Introduction to benefits in kind
You may want to negotiate with your employer to provide you with BIK such as a company car and company accommodation, instead of a direct cash allowance for car and accommodation.

Dual employment contract
A dual employment contract means there will be two employment contracts: one with the local employer in respect of duties carried out locally and another with a non-local entity in respect of duties carried out outside the country.

EPF contributions
Most employers only contribute the mandatory 12% of the employee’s monthly salary to EPF. These contributions are tax deductible for the employer and tax exempt for the employee. What an employee can do to reduce his tax liability is to ask for a higher EPF contribution rate from his employer and reduce his monthly salary by the same amount.

Related post : Income Tax : Forms Printing