The Government has initially introduced special tax deduction on cost of renovation incurred from 1 March to 31 December 2020 in the first economic stimulus package announced by our former Prime Minister, Tun Dr. Mahathir Mohamad on 27 February 2020. This initiative has further extended until 31 December 2021, under the National Economic Recovery Plan (PENJANA) which was presented by Tan Sri Muhyiddin Yassin on 5 June 2020. This move has officially gazette through P.U. (A) 381/2020 on 28 December 2020.

The total cost of renovation eligible for special deduction under paragraph 33(1)(d), incurred during these periods are RM300,000.

Eligibility Criteria

• The eligible period is from 1/03/2020 and has been extended to 31/12/2022 from the *2022 Budget Announcement.
• Eligible amount up to RM 300,000.
• YA(s): 2020 & 2021
• Cost of renovation on BUSINESS PREMISE incurred for BUSINESS PURPOSE
• Must be certified by external auditors
• Following expenses are not eligible for special deduction:

□  Designer fee

□  Professional fee

□  Purchase of antique

Documents required

• Invoices
• Service agreement
• External Auditor’s Letter of Certification

Eligible Cost

The PU Order has stated below expenses eligible for special deduction, provided it must be certified by external auditor:

• First Schedule:

□  General electrical installation

□  Lighting

□  Gas system

□  Water system

□  Kitchen fittings

□  Sanitary fittings

□  Door, gate, window, grill & roller shutter

□  Fixed partitions

□  Flooring (including carpets)

□  Wall covering (including paint work)

□  False ceiling & cornices

□  Ornamental features or decorations excluding fine art

□  Canopy or awning

□  Fitting room or changing room

□  Recreational room for employee

□  Air-conditioning system

□  Children play area

□  Reception area

□  Surau

Note:

• Please ensure the invoices stated clearly each item incurred for the renovations/refurbishment and certified by the external auditor.
• To separate the renovation cost specifically in separate P&L account ledger, for easy monitoring.

These Rules is not applicable should a taxpayer made separate claim for deduction as allowable expenses, or as capital allowance, to avoid double claiming issue.

Source from e-Federal Gazette Official Portal (http://www.federalgazette.agc.gov.my/outputp/pua_20201228_P.U.%20(A)%20381.pdf)

For more information, please click: pua_20201228_P.U. (A) 381

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