As a business owner, do you know you are given the right to claim capital allowances on assets when computing your tax computation?
Every assets that you own and used in the production of your business gross income will enjoy different rate of capital allowance as follows:
| Type of assets | Initial Allowance | Annual allowance |
| Plant & machinery | 20% | 14% |
| Motor Vehicles | 20% | 20% |
| Others | 20% | 100% |
Inland Revenue Board has given special allowance rate (“Accelerated Capital Allowance”) for those assets below value of RM2,000 each. Taxpayer is able to claim 100% Accelerated Capital allowance (“ACA”) if the assets acquired meet the criteria mentioned above. ACA given will subject to a total restriction of RM20,000 per annum. However, this restriction will not applicable to Small Medium Enterprise (“SME”).
The new definition of SME are as follow:
- Resident company with paid-up capital of RM2.5 million and below at the beginning of the basis period
- Company having gross business income from one or more sources for the relevant year of assessment of not more than RM50 million
- Resident company which is not controlled by or control any company that have paid-up capital more than RM2.5 million
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