What is the tax treatment for the income received by Specialist Doctors?

IRB has produced a guideline on tax treatment for specialist doctors again on 16 March 2022!

01Summarised below are the key salient points :

02Case study 1

A specialist doctor with a Sdn Bhd has an agreement with a private hospital.

- Doctor has received consultation fees from the hospital.

- Patient was referred by the private hospital and paid to the hospital directly.

- Facilities in the private hospital have been used during medical treatment.

Tax treatment: The consultation fee received shall be reported under S4(a) of ITA 1967 as individual business income.

03Case study 2

A specialist doctor with a Sdn Bhd has been involved in consultation services and medical-related fields (i.e. medical goods trading, pharmaceuticals, and health aids).

Tax treatment: As there are two types of income, it shall be declared with separated sources of income.

a) The consultation fee received shall be reported under S4(a) of ITA 1967 as individual business income.

b) The medical goods trading income shall be reported under S4(a) of ITA 1967 as individual or company business income.

*** Form B: S4(a) of ITA 1967 as individual business income

*** Form C: S4(a) of ITA 1967 as company business income

04Case study 3

A specialist doctor with a Sdn Bhd owns a clinic in a private hospital.

- Patient visits the clinic directly without any referral by the private hospital.

- No facilities in the private hospital are being used during medical treatment.

Tax treatment: The consultation fee received shall be reported under S4(a) of ITA 1967 as company business income.

05Case study 4

A specialist doctor under an employment contract with a private hospital.

- Doctor has received director remuneration from the hospital.

Tax treatment: The director remuneration received shall be reported under S4(b) of ITA 1967 as employment income.

06Expenses can be claimed against S4(a) business income of ITA 1967

Condition: The expenses incurred are wholly and exclusively in the production of gross income.

Example for expenses:

•  Professional indemnity insurance
•  Seminars, workshops or conferences approved by CPD Review Committee
•  Rental of equipment/ operating room in a private hospital
•  Medical practitioner license and etc.

07Capital allowance can be claimed against S4(a) business income of ITA 1967

Persons Eligible to Claim Capital Allowances

•  A person who is carrying on a business;
•  Has incurred capital expenditure on an asset for the business;
•  The asset is used for business purposes.

08Source:

Garis Panduan Layanan Cukai Ke Atas Pendapatan Pengamal Perubatan (Doktor Pakar) Di Hospital Swasta Sama Ada Ditaksir Di Bawah Individu Atau Syarikat

https://bit.ly/37bHJfQ

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