How to file your taxes when you get retrenched?

Tax Filing

According to LHDN on their website, compensation for the loss of employment is a payment made by an employer to his employee before or after the date of termination, and a certain amount of this payment is exempted from tax. The same applies to severance packages such as Voluntary Separation Schemes (VSS).

However, compensation received by a director (not service director) of a Control Company is fully taxable.

Sometimes, our interpretation of “termination benefits” may differ from the LHDN. Thus, should any complication occur, you must try to explain the issue with LHDN. If necessary, you may even need to engage a tax specialist from Eurogain to talk to LHDN.

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