Special Deduction on Renovation and Refurbishment Expenses

One of the tax measures introduced under the Short-Term Economic Recovery Plan (“PENJANA”) was the Special tax deduction for renovation and refurbishment of business premises, which has recently been gazette under P. U. (A) 381. 

These Rules have the effect from the year of assessment 2020.

Criteria for claiming the special deduction are as follows:-

- The cost of renovation and refurbishment must be incurred for business premise

- The cost is to be incurred from 1 Mar 2020 until 31 Dec 2021 (Qualifying period)

- Subject to maximum of RM300,000 for the entire qualifying period 

- The cost which is entitled for the deduction is specified in the First Schedule of the Gazette Order, as follows:-

    

- It shall not include the cost specified in the Second Schedule, as follows:-

- The cost of renovation and refurbishment incurred must be certified by an external auditor. For the purpose of audit certification, kindly ensure the supporting documents are in place, such as supplier invoices, proof of payment, photo of renovation work (before and after). Site visit may be requested by external auditor for verification purpose. 

- The special tax deduction does not apply where capital allowance or allowable expense under S33(1) ITA 1967 has been claimed in relation to the cost of renovation and refurbishment.

P.U. 381 - Income Tax (Costs of Renovation and Refurbishment of Business Premises) Rules 2020