“Use company money pay my personal tax first. Deadline coming already.”

Boss said it like nothing.
Account lady panic.

She called me straight away.
“Mr Koh, can or not ?”

This tax question looks biasa today.
But can become very expensive when LHDN asks later.

In many SMEs, the boss thinks very simple:
“Company is mine.”
“Personal tax also mine.”
“Use Sdn Bhd bank pay first.”

Sounds familiar?
Many SME bosses don’t purposely do wrong.
They just mix up the pockets.
But in tax … the pocket matters.

When company pays director’s personal tax, LHDN may treat it as tax borne by employer.

In simple English … a taxable benefit to the director.

So I told the account lady:
“You are right to worry.”

Must be recorded.
Must be reported.
Must be supported.
Two traps usually happen here.

Trap 1 : Company pays the tax, but EA form stays quiet.

This one super common.
Bank payment done.
Deadline met.

Everyone happy.
But the benefit never appears in the EA form.

Director : personal income under-reported.
Company : EA form, CP8D, Form E all wrong.

LHDN can disallow the tax borne by employer entirely because no PCB was deducted on the amount.

Trap 2: Company claims deduction, but file got no support.

Yes, employer-paid tax may be deductible.
But if the person is the director, shareholder, AND boss?

LHDN will look closer.
Is this real remuneration?
Or profit distribution dressed up as salary?

Sometimes account staff are not being difficult.
They are protecting the company.
They are protecting the boss.
They are protecting themselves.

And that’s why I’m writing this especially for her, and for every account lady out there who kena scolded for asking the “extra” question.

Keep asking.

You are saving your boss the money he doesn’t even know he’s about to lose. 🙏