Expenses ( Water, Electrical, TM, Handphone bill) not under company name, claimable?
This is not in the BL category.
You can use TX-NC for new tax code.
Below is the Blocked Item (BL) as stated in the GST Act 2014 :
Blocked Input Tax
Input tax incurred by a taxable person in respect of the following supplies shall be excluded from any credit under GST:-
(a) the supply to or importation by him of a passenger motor car;
“passenger motor car” means a vehicle which is legally licensed and constructed, modified or adapted for the purpose to carry or capable to transport and commonly available or used on public roads in Malaysia. The specification and features of a passenger motor car is to have seats of not more than nine passenger including the driver and the unladen weight does not exceed three thousand kilograms but does not include:
(i) hire and drive car which is licensed under Land Public Transport Act 2010 and Tourism Vehicle Licensing Act 1999;
(ii) a motor car supplied to or imported by a taxable person for the purposes of being let on hire or sold by that taxable person who is a dealer of motor vehicles licensed under the Second-Hand Dealers Act 1946;
(iii) an approved vehicle used for driving instructional purposes by a driving school or driving institute permitted under Motor Vehicles (Driving Schools) Rules, 1992;
(iv) a motor car which forms part of the stock in trade of a motor manufacturer or a motor dealer; or
(v) any motor car which is used exclusively for the purposes of business as approved by the Director General which includes:
– test drive car ‐ a car used for a limited period in order to assess its performance and reliability. (Only for car dealer); or
– cars used for security purposes – a car used by security officers only for patrol in the company’s compound to protect the business premise; or
– cars used in providing technical assistance ‐ a car used mainly in providing technical assistance to company’s clients e.g. maintenance services, breakdown services, repair services; or
– serve as an integral part in the running of a business (cannot continue business without them). It is a business that requires the use of passenger motor cars e.g. leasing of cars, taxi rental business;
– and must fulfil all the following conditions:
• the motor car is registered in the name of the company;
• the motor car is not let on hire;
• there is no intention to make available the motor car for private use;
• the motor car is kept at the business premises, used for business trips and must not be taken home overnight by any employee; and
• the motor car bears the business name.
However, a taxable person is allowed to claim the input tax incurred on the following expenses relating to a passenger motorcar registered in his own name:
(a) Insurance premium;
(b) Petrol, diesel and NGV;
(c) Parking; and/ or
(d) Battery certified by a competent body recognized by the DG of Road Transport Department for use in electric motor car under the Motor Vehicles (Construction and Use) Rules 1959 [LN 170/1959].
For passenger motorcar that is owned or registered under the name of other entity, any input tax incurred on the expenses listed in Paragraph 11 are allowed to be claimed by a taxable person except the input tax on insurance premium. However, a taxable person must fulfill the following conditions:
(a) The passenger motorcar is used in his business and attributable to the taxable supply made by him;
(b) The expenses are reimbursed and accounted as his business expenses; and
(c) Hold a valid tax invoice on the expenses acquired.
(d) club subscription fee including any joining fee, subscription fee, membership fee and transfer fee charged by any club, association, society or organization established principally for recreational or sporting purposes. However, input tax is claimable for expenses for use of club facilities, e.g. green fees, buggy fees, rental of golf bag locker and dining at the club restaurants.
(e) any payment or contribution towards any insurance contracts or takaful certificates-
(i) for indemnifying the taxable person against the cost of medical treatment to any person;
(ii) against the cost of medical treatment in which the insured or participant is a person employed by the taxable person;
(iii) against any personal accident in which the insured or participant is a person employed by the taxable person, but does not include any insurance contract or takaful certificate against any liability which the taxable person may incur under the Employees’ Social Security Act 1969 and the Workmen’s Compensation Act 1952 where such expenses is obligatory under that Act or under any collective agreement within the meaning of the Industrial Relations Act 1967.
(c) any medical expenses incurred in connection with the provision of all forms of medical treatment to any person employed by a taxable person but does not include medical expenses incurred under the Employees’ Social Security Act 1969 and the Workmen’s Compensation Act 1952 where such expenses is obligatory under that Act or under any collective agreement within the meaning of the Industrial Relations Act 1967.
(d) any family benefits including hospitality of any kind provided by the taxable person for the benefit of any person who is the wife, husband, child, including adopted child in accordance with any written law or parents of any person employed by the taxable person.
(e) entertainment expenses to a person other than employees or existing customers except entertainment expenses incurred by a person who is in the business of providing entertainment.
“entertainment expense” includes-
(i) the provision of any food, drink, recreation or hospitality of any kind, or
(ii) the provision of accommodation or travel associated with the provision of food, drink or recreation
by a person or an employee of his to anyone in connection with a trade or business carried on by that person.
“employee”, in relation to an employment, means:
(i) the servant, where the relationship of master and servant subsists;
(ii) where the relationship of master and servant does not subsist, the holder of the appointment or office which constitutes the employment.
“recreation or hospitality” would include:
(i) a trip to a theme park or a recreation centre;
(ii) a stay at a holiday resort;
(iii) tickets to a show or theatre; and
(iv) entry to sporting activities/events.
GST incurred on entertainment expenses to family members of company staff, potential clients (not existing clients) including suppliers or vendors of the company are not allowed to be claimed as input tax credit.
(You can also download and refer to GST Guide on Input Tax Credit as at 4 January, 2017).