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Tax Deductible Expenses (Malaysian Income Tax)

21 Dec, 2026, Remote Online Training - Public

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THILLESWARY A/P SELVARAJA

Chartered Tax Practitioner (CTP) & Tax Agent

 

Thilleswary A/P Selvaraja is a Chartered Tax Practitioner (CTP) and licensed Tax Agent (approved under Section 153(3) of the Income Tax Act 1967) with over 20 years of experience spanning taxation, accounting, and corporate advisory.

 

Thilles is committed to continuous professional development, she is a HRD Corp Accredited Trainer, empowering individuals and businesses with essential tax and financial knowledge through structured training programs.

 

Qualifications & Accreditations

Chartered Tax Institute of Malaysia (CTIM) Certification Associate member of CTIM, demonstrating advanced expertise in Malaysian tax laws and regulations.

 

Chartered Certified Tax Practitioner (CTP) Accredited Chartered Certified Tax Practitioner, showcasing proficiency in global tax practices and compliance.

 

HRD Corp Accredited Certified Trainer Recognized by the Human Resources Development Fund (HRDF) as a certified trainer, committed to delivering high-quality training programs.

 

Direct Tax Specialist Extensive expertise in corporate taxation, international taxation, and compliance with local and global tax regulations.

 

Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) Associate Affiliate member of MAICSA.

 

Thilles holds a BA (Hons) in Accounting and Finance and an MBA in Finance (General) from the University of Southern Queensland (2013).

 

With a career spanning both corporate and independent practice, she has worked as a Tax Senior in various local tax firms and a multinational oil & gas corporation before establishing her own firm. She specializes in tax preparation, advisory services, and financial accounting, providing tailored tax solutions that simplify tax management and planning for businesses.

 

Renowned for her ability to break down complex tax concepts into clear, easy-to-understand insights, Thilles has earned strong endorsements from business owners and professionals alike. Her strategic approach to tax solutions has helped numerous businesses streamline their tax processes with confidence.

 

Venue Details

Remote Online Training - Public


Contact us

FOR COURSE DETAILS

Juliany,

Office: 03 2283 6109

Mobile: +60 122281247

juliany@ipa.com.my

Phoebe,

Office: 03 2283 6100

Mobile: +60 193637822

phoebe@ipa.com.my

Bee Teng,

Office: 03 2282 6112

Mobile: +60 172566121

beeteng@ipa.com.my

FOR CUSTOMISED IN-HOUSE TRAINING

Jane,

Office: 03 2283 6101

Mobile: +60 129418251

jane@ipa.com.my

Keith,

Office: 03 2283 0000

Mobile: +60 162272735

keith@ipa.com.my

ADDRESS

A-28-5, 28th Floor, Menara UOA Bangsar,
No.5, Jalan Bangsar Utama 1,
59000 Kuala Lumpur

FOCUSING ON
  • Session 1 — Foundations
  • Session 2 — Timing Rules & Specific Deductions
  • Session 3 — Bad Debts, Legal Fees & Other Specific Expenses
  • Session 4 — Special/Double Deductions, Restrictions
  • Session 5 — Case Law Review & Q&A
COURSE OBJECTIVES

Know what to claim, when to claim it and how to support your deductions.

 

Business expenses can receive different treatment for accounting and tax purposes. Understanding these differences is essential to identifying eligible deductions, preparing accurate tax computations and avoiding costly errors.

 

This practical 1-day course equips participants with a structured approach to assessing tax deductible expenses under Malaysian Income Tax.

 

Through practical case studies, worked examples and selected court decisions, participants will learn to evaluate everyday expenditure, recognise deduction opportunities and identify restrictions that affect their claims.

AFTER ATTENDING THIS COURSE YOU WILL RETURN TO YOUR JOB…
  1. Spotting deductions that may otherwise be overlooked Reviewing business expenditure more systematically and recognising potential claims for specific, special and double deductions.
  2. Making clearer decisions on everyday expense claims Applying a practical framework to questions involving repairs versus improvements, business versus private expenditure, entertainment and professional fees.
  3. Reducing avoidable Tax Computation errors Recognise expenses that require an add-back, are subject to restrictions or depend on specific qualifying conditions.
  4. Managing deduction timing with greater confidence Understanding how commencement dates and the timing of expenditure can affect the tax treatment of business costs.
  5. Supporting claims with stronger documentation Identifying the records, explanations and recovery evidence relevant to substantiating deductions, including bad debt claims.
  6. Understanding why similar expenses can receive different Tax Treatment Looking beyond the description on an invoice to assess the purpose, nature and circumstances of the expenditure.
  7. Anticipating questions during a Tax Review or Audit Recognising areas likely to require closer scrutiny and preparing clearer explanations for the treatment adopted.
  8. Giving more useful input to business spending decisions Discussing the potential tax implications of financing, renovation, employee expenditure and other business costs before commitments are made.
  9. Communicating more effectively with management and tax advisers Explaining deduction issues clearly, asking more focused questions and resolving uncertainties more efficiently.
  10. Applying lessons from practical cases immediately Bringing the course’s worked examples and case discussions into your review of expense claims, year-end adjustments and Tax Computations.
WHO SHOULD ATTEND
  • Business Owners
  • Directors
  • Finance Managers
  • Accountants
  • Tax and Audit Personnel
  • HR/Payroll teams
  • Accounts Executives and Advisors responsible for expense claims, documentation or tax computations.
METHODOLOGY
  • Interactive Lectures & Videos
  • Questions and Answer
  • Group Activities
  • Group Presentation
  • Evaluation
COURSE CONTENT
9:00

SESSION 1 — FOUNDATIONS

Capital vs Revenue Expenditure & General Deduction Principles

  • Overview of expenditure classification: Revenue (deductible, subject to rules) vs Capital (P&M ? Capital Allowance; Industrial Building ? IBA)
  • Tax computation format for companies: from PBT to Adjusted Income (add- backs, non-taxable income, investment income, double deductions, revenue expenses capitalised)
  • Tax treatment ? Accounting treatment: interest capitalised under accounting standards but deductible under S33(1)(a); capital items expensed in P&L but not deductible (e.g. calculators, tables, chairs)
  • Section 33(1): the general deduction test — outgoings and expenses wholly and exclusively incurred in the production of gross income
  • The 7-point deduction test summary: outgoings/expenses; wholly and exclusively; incurred (not a provision); in the production of gross income; revenue in nature; not prohibited under S39
  • Section 39(1): specifically prohibited expenses — domestic/private expenses, capital withdrawn, non-approved schemes, entertainment (introduced, detailed later) • Capital vs Revenue indicator table: fixed vs circulating capital, business structure vs process, enduring benefit vs non- enduring, acquiring vs maintaining trade rights, creating vs preserving a source of income
10.45

SESSION 2 — TIMING RULES & SPECIFIC DEDUCTIONS

Date of Commencement of Business

  • Why the commencement date matters: pre-commencement expenses are not deductible; capital allowances can only be claimed after commencement
  • Industry-specific commencement tests: hotel (date opened to public), retail (date goods purchased for resale), manufacturing (first successful trial run), agriculture (first planting/buying of stock)
  • Worked example: hotel with pre- commencement salary/utilities/travelling vs same costs incurred after commencement

Specific Deductible Expenses under Section 33(1)

  • Interest expense (S33(1)(a)) — Public Ruling 2/2011: loan employed in production of gross income, or laid out on an asset held for that purpose - Worked examples 1–4: working capital loan, machine purchase loan, factory- under-construction loan, and pre- commencement interest (not deductible)
  • Rental expenses (S33(1)(b)) — conditions relating to occupation, period, and purpose of the land/building
  • Repair and renewals (S33(1)(c)) — Public Ruling 6/2019: distinguishing repairs/ maintenance (revenue) from renovation/ reconstruction (capital) - Key concepts: initial repairs, replacement of an ‘entirety’ vs ‘part of an entirety’, and improvement - Case illustrations: Syarikat Chester (initial repair, not deductible), Harta Sdn Bhd (roof replacement — part of entirety, deductible), Syarikat Macaron (structural improvement, not deductible)
1:00 Lunch
2:00

SESSION 3 — BAD DEBTS, LEGAL FEES & OTHER SPECIFIC EXPENSES

Bad and Doubtful Debts (S34(2)) — Public Ruling 4/2019

  • Specific provision on trade debts (deductible) vs general provision (not deductible)
  • Steps to qualify: trade-related debt included in gross income; reasonable recovery steps taken; circumstances qualifying as bad (debtor died/untraceable, bankrupt/liquidation, statute-barred)
  • Debt recoveries are taxable if a prior deduction was claimed
  • Forgiving/waiving debt and debts due from related/connected persons — arm’s length considerations (Fuchsia/Garnet and Herriot/Jaya Printers examples)

Legal and Professional Fees — Public Ruling 6/2006

  • Deductible: fees incurred wholly and exclusively in production of income, or in maintaining existing trade rights/facilities (e.g. trade debt recovery, trading contracts, audit fees)
  • Non-deductible: fees for acquiring new rights/facilities (e.g. loan agreements, raising capital, secretarial fees, AGM expenses, tax appeal costs)

Secretarial and Tax Filing Fees

  • Evolution of the deduction: separate RM5,000/RM10,000 caps (Budget 2015) ? combined RM15,000 cap (Budget 2020) ? ‘incurred’ basis without requiring payment (2021 update)

Other Specific Items

  • Loss of cash due to theft/embezzlement — Public Ruling 4/2012 (deductible for 3rd party/employee theft; not deductible for owner/director/partner theft)
  • Retrenchment payments (deductible if not linked to business closure), AGM expenses (not deductible), foreign exchange loss (must be trade-related and realised)
  • Guarantee and commitment fees — nature- based treatment, including the Persatuan Nelayan Kebangsaan case on bank guarantee fees

Entertainment Expenses — Public Ruling 4/2015

  • 100% deductible: staff entertainment, entertainment for payment in the ordinary course of business, overseas trade fair gifts, product samples, sales-related entertainment
  • 50% deductible: existing customers and suppliers
  • Not deductible (0%): potential customers, government officials, business associates, related company employees

 

3:45

SESSION 4 — SPECIAL/DOUBLE DEDUCTIONS, RESTRICTIONS

Pre-Operational and Special Deductions

  • Qualifying pre-operational business expenditure (Schedule 4B), incorporation expenses, recruitment expenses, and franchise fees — each with specific qualifying conditions

 

Double Deductions

  • Overview: R&D, approved training, export pro motion, tourism promotion, remuneration for disabled/senior citizen/ex-convict employees, child care provision

 

Specifically Disallowed and Restricted Expenses

  • Domestic/private expenses, capital with drawn, non-approved schemes, non- compliance with withholding tax, leave pas sage
  • Motor vehicle rental restrictions: caps of RM100,000/RM50,000 depending on vehicle cost
  • Restrictions on payments to Labuan entities and the substance-based tax treatment under LBATA
 

SESSION 5 — CASE LAW REVIEW & Q&A

Property Developer Deduction Cases

  • Prima Nova Harta Development S/B v DGIR and Taman Equine (M) S/B v DGIR — bu miputra discount payments held not deductible
  • Mitraland Kota Damansara v KPHDN (land mark ruling) — Court of Appeal held the bumiputra discount payment deductible under S33(1), but the additional penalty for unauthorised sales was not deductible
  • EASB v DGIR and SUSB v DGIR — low-cost housing exemption contribution payments held not deductible

 

Financing Expenses Case

  • POM, PMR and PFI v KPHDN — Court of Ap peal landmark ruling: upfront fees, stamp duty, and legal fees for working capital facilities held deductible under S33(1)

 

Wrap-Up

  • Open discussion, practical application exer cises, and Q&A
5:00 End of Course