Conditions to Claim Special Tax Deduction
If you have done any renovation and refurbishment work, take note of the following conditions to ensure that you do not miss out on this particular tax deduction.
1. It applies to any taxpayer who incurs expenses on renovation and refurbishment on business premises.
2. The business premises are used by the taxpayer for business purposes.
3. The deduction is given in determining the adjusted income of the taxpayer’s business under paragraph 4(a) of the Income Tax Act (ITA) 1967.
4. The renovation
and refurbishment expenses are incurred from 1 March 2020 to 31 December 2022.
5. Total amount of deduction is up to a maximum of RM300,000 on the costs of renovation and refurbishment as
stated in the First Schedule but shall not include costs as stated in the Second Schedule of the Income Tax (Cost of Renovation and Refurbishment of Business Premise) Rules 2020.
6. The costs incurred must be certified by an external auditor (a certified auditor who can verify the expenditure incurred by the taxpayer).
- The
verification needs to be made via a special certification in any appropriate format/ form (not specified—can be a letter).
- The fee paid to the external auditor shall be excluded
from the renovation costs and such fee will be non-tax-deductible.
Make sure you have these supporting documents so that you can claim this tax
deduction without any issues arising:
- Business Registration Certificate
- Proof of ownership of business premises
- Invoice of all renovation and refurbishment expenditures
- Verification by an external auditor
What if I don’t own the business premise? Does this mean I won’t be entitled to this special tax deduction? What if my renovation costs exceed RM300,000? What happens then? If I claim capital allowance, can I claim this tax deduction too?
