Due to the COVID-19 pandemic which affected many businesses, various tax initiatives were announced since last year through multiple Economic Stimulus Packages for the benefit of these businesses.
Some of these tax initiatives are only applicable for a certain period of time and as such, businesses may want to explore and take immediate action to take advantage of the benefits from these tax initiatives.
In this connection, let us go through a select few of the tax initiatives that can be of interest to you and your business –
1. Renovation and Refurbishment cost (R&R cost)
PLAN the renovation of your business premise. Up to RM300,000 of R&R cost is allowed to be deducted against the Company’s adjusted income on certain “specified” R&R costs incurred from 1 March 2020 to 31 December 2021. Please note that under normal circumstances, such R&R cost does not rank for a tax deduction against the Company’s adjusted income.
2. Accelerated Capital Allowance
PLAN the acquisition of your Company’s fixed assets. Claim “accelerated” capital allowance within 2 years of assessment (YAs) in respect of qualifying plant expenditure incurred from 1 March 2020 to 31 December 2021 for the Company’s business purposes.
3. Special Reinvestment Allowance
PLAN your Company’s reinvestment. For manufacturing or agricultural companies which have exhausted their 15 YAs of reinvestment allowance (RA) claim, a “special RA” is given for a period of 3 YAs, i.e. from YAs 2020 to 2022. This special RA is only applicable for qualifying projects on expansion, modernisation, automation or diversification.
“Deadline”: YA 2022
As we enter the last quarter of 2021, it is still not too late to PLAN your capital expenditures and investments to be aligned with your business objectives and to maximise the tax deductions and incentives available. It is important to note that the above tax deductions and incentives are subject to certain conditions and rules to be complied with under the income tax legislation in order to make a claim.