Expense Claim Form (Malaysia)

An Expense Claim Form in Malaysia commences or advances proceedings by stating the claim and the relief sought.

Business expense reimbursements are treated as non-taxable in the hands of the employee under the Income Tax Act 1967 (Act 53) provided the expenses are wholly and exclusively incurred in the production of employment income and are supported by valid receipts. Section 13(1)(a) of the Income Tax Act 1967 includes employment income within the charge to tax, but reimbursements of actual business expenses do not form part of assessable employment income under the LHDN (Lembaga Hasil Dalam Negeri Malaysia, the Inland Revenue Board) Public Ruling No. 2/2013 on employment income. Allowances paid in excess of actual expenses incurred are treated as part of gross employment income and must be declared in the employee's annual tax return (Borang BE or Borang B).

The Wages Council Act 1947 and the Employment Act 1955 (Act 265) do not specifically regulate business expense reimbursements, but an employer's failure to reimburse agreed expenses may constitute a wage deduction or breach of contract actionable in the civil courts or through the Labour Court under Section 69B of the Employment Act 1955. The employment contract or company expense policy sets the categories, limits, and approval workflow for expense claims.

An Expense Claim Form differs from an Overtime Claim Form in that it covers costs incurred externally rather than additional time worked, and from a payroll form in that reimbursements are not 'wages' under Section 2 of the Employment Act 1955 and are therefore not subject to EPF contributions under the Employees Provident Fund Act 1991 (Act 452) or SOCSO contributions under the Employees' Social Security Act 1969 (Act 4) — provided they represent genuine reimbursements of actual expenses rather than disguised remuneration.

The legal framework governing the Expense Claim Form (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Expense Claim Form (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Employment Act 1955 (Act 265) sets the foundational requirements.

An Expense Claim Form in Malaysia is required whenever an employee incurs out-of-pocket expenditure on behalf of the company and seeks reimbursement from the employer.

An Expense Claim Form is needed after business travel within Malaysia or overseas, covering transportation costs such as toll charges, petrol mileage, Grab or taxi fares, flight tickets, and hotel accommodation. Without a completed claim form, the employee cannot obtain reimbursement and the employer cannot record the expense in the company's accounts for tax deduction under Section 33 of the Income Tax Act 1967.

An Expense Claim Form is required when an employee incurs client entertainment expenses such as meals, golf games, or events. Entertainment expenses are subject to special tax treatment under Section 39(1)(l) of the Income Tax Act 1967, which restricts deductibility to 50% of entertainment expenditure. A claim form with supporting receipts enables the company's tax agent to apply the correct 50% restriction when preparing the company's tax return submitted to LHDN.

An Expense Claim Form is needed after an employee purchases office supplies, stationery, or work-related materials using personal funds. These expenses are fully deductible for the company under Section 33 of the Income Tax Act 1967 as revenue expenditure incurred in producing business income.

An Expense Claim Form is required for telecommunications expenses — mobile phone bills and internet charges — where the employee uses personal subscriptions for business purposes under a company policy. Service Tax at 8% under the Service Tax Act 2018 applies to telecommunications services, and receipts showing the tax component support the employer's tax deduction claim.

An Expense Claim Form is needed when an employee pays registration fees, seminar costs, or professional development expenses on behalf of the company, particularly where HRDF (Human Resources Development Fund) levy credits are involved. Under the Human Resources Development Fund Act 2001 (Act 612, now the Human Resources Development Corporation Act 2021), HRDF-registered employers may apply HRDC (HRD Corp) levy credits to reimburse training costs, and the expense claim form supports the HRDC grant application.

A Malaysia Expense Claim Form must contain the following elements to satisfy accounting, tax, and employment requirements.

Employee identification: Full name, employee ID, department, designation, and cost centre or project code. The cost centre code enables the finance department to allocate the expense to the correct account in the company's management accounts and to track departmental budgets.

Expense date and description: The date of each expense, a description of the business purpose, the vendor or supplier name, and whether the supplier is SST-registered under the Sales Tax Act 2018 or Service Tax Act 2018. LHDN requires that business expense deductions be supported by receipts from registered suppliers where applicable under Public Ruling No. 12/2019 on basis period for companies.

Expense category: A standard categorisation of the expense type — transportation, accommodation, meals, entertainment, stationery, training, or miscellaneous — to enable correct tax treatment and budget reporting. Entertainment expenses must be separately identified for the 50% restriction under Section 39(1)(l) of the Income Tax Act 1967.

Amount in Malaysian Ringgit (RM): The expense amount in RM with SST breakdown where applicable. Service Tax at 8% under the Service Tax Act 2018 (effective from 1 March 2024 following the amendment from 6% to 8%) is a tax cost to the employer if the company is not registered for Service Tax.

Receipt reference and attachment: Receipt serial number, whether original receipt or electronic receipt (e-receipt) is attached, and confirmation that the receipt is from a registered business under the Suruhanjaya Syarikat Malaysia (Companies Commission of Malaysia, SSM) registration under the Companies Act 2016 (Act 777) or the Business Registration Act 1956.

Mileage claim: For travel by personal vehicle, the distance in kilometres, the applicable mileage rate per km as set by company policy (LHDN's benchmark rate is RM0.60 per km for cars), and the total mileage claim amount. Vehicle registration number should be included to support the claim.

Managerial approval: Authorisation signature from the employee's line manager and department head, confirming the expense was incurred for business purposes. Finance department counter-approval confirms the claim meets company policy limits and payment will be processed in the next payment cycle.

Additional compliance elements for a Expense Claim Form (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.