The Inland Revenue Board of Malaysia (IRBM) has issued a new public ruling providing guidance on the 100 percent special allowance afforded to businesses for capital expenditure incurred on their purchase of small value assets.
The objective of this Public Ruling (PR) is to explain the special allowances accorded to small value assets.
According to Malaysian income tax act, small value asset means plant or machinery used for the purpose of a person’s business where the qualifying plant expenditure of the asset is not more than RM1,300 but it does not include assets that have an expected life span of not more than 2 years. The claim for special allowances for small value assets is restricted to a maximum amount of RM13,000 for each year of assessment. If a person has incurred qualifying plant expenditure on small value assets exceeding RM13,000 in a year of assessment, then the excess amount of qualifying plant expenditure in respect of an asset not subject to the special allowances rate is eligible for the normal capital allowance rate provided under paragraphs 10 and 15, Schedule 3 of the ITA.
Prior to YA 2015, the value of each small value asset was not to be more than MYR1,000, and the claim for special allowances for small value assets was restricted to a maximum amount of MYR10,000 for each YA.
