IT IS not uncommon for employers and employees to overlook the reporting of benefits in kind (BIK) and perquisites provided by employers to their employees. Failure to disclose these benefits can result in the employer being taken to court and, upon conviction, being liable to a fine of up to RM20,000, imprisonment for up to six months, or both.
It is not the employer alone who will bear the consequences of failing to report BIK and perquisites. Employees will also face tax consequences.
Upon discovery of the under-reporting of income, the employees will be subject to tax adjustments together with penalties, which in practice could be in the region of 45%. Both employers and employees therefore face tax consequences arising from the non-declaration or under-reporting of benefits in kind and perquisites.
