Referring to Section 25 (2A) of the Income Tax Act 1967, bonus and directors' fee paid to employees or directors respectively are taxed in the year of assessment the bonus and directors' fee are received.
For example, Employee A received 2008 performance bonus in February 2009, this bonus shall be deemed to be income for the year of 2009 and declared in the EA Form 2009.
Prior to 2009, the bonus and directors' fee received was taxed in the period when the income was earned. For examples, 2008 bonus received in 2009 but the bonus must be reported and declared in 2008. As a results, it involves additional administrative work to revise the Form BE and payment of additional income tax as per latest computation.
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