Quarters

• Quarters

• Rent reimbursement by an employer is exempt. The employer is only subject to tax on maximum 10% of his net assessable income in respect of the provision of quarters. Employee can discuss with his employer to let the employer pay the rent for his quarter. While the total salary expense remain the same, employee can reduce his tax liability.

• Provision of fringe benefits and facilities

• As long as the fringe benefits provided by the employer are not convertible into cash, they will not be treated as assessble income of the employeee. According to the IRO, only the abovementioned quarters, holiday warrants and options are exempted from tax.

• Therefore, employer can increase the fringe benefits of employess without increasing their salaries. Those exempted fringe benefits include:-

• Provision of messing, but it must be non-transferrable coupons;

• Provision of motor vehicle, but it can be lent to others by the employee;

• Medical and dental services arranged by the employer;

• Provision of furniture and residential facilities;

• Servant/driver employed by the employer;

• Contract entered into between the employer and the utilities suppliers (ie the elctricity company, the gas company, the water authority) for the supply of facilities to the employee's home;

• The employer can set up a discretionary trust from which the income can be used to pay for the education of the employer's children.

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