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Tax Update: Cost of R&R of Business Premises

Updated: Dec 28, 2022

A tax deduction of up to RM 300,000 was suggested as part of the First Economic Stimulus Package, which was unveiled on 27th February 2020, for expenses paid between 5th March and 31st December 2020, for remodeling and rebuilding business properties. After then, it was recommended that the tax deduction be extended to cover such costs incurred until 31st December 2021 in the Short-term Economic Stimulus Package announced on 5th June 2020.

The business is allowed to claim a tax deduction for costs of renovation and refurbishment of business premises under the Income Tax Rules 2021.

The conditions to claim the special deduction:

  • All business premises, regardless of whether they are owned or rented by the taxpayer would qualify for the deduction.

  • This is no condition that the taxpayer claiming the deduction uses the premises for business purposes.

  • The eligible period is from 1st March 2020 and has been extended to 31st December 2022.

  • The cost of renovation and refurbishment of the business premises must be certified by an external auditor.

Taxpayers claiming the tax deduction are required to retain the following supporting documents, to be produced in the event of an audit:

  • Business registration certificate.

  • Proof of ownership of the business premises or valid tenancy agreement.

  • Invoices for the renovation and refurbishment costs.

  • Certificate of the said costs by an external certified auditor.