There are a wide range of tax incentives in Malaysia that businesses can apply to maximise its tax benefits. Here are some of the categories that are not industry specific but allow businesses to enjoy twice the amount of expenses incurred i.e. 200% tax deduction on qualifying expenditure.
1) Childcare allowance
Companies providing childcare allowance to employees with children aged 12 and below or paid directly to childcare centres can enjoy a double tax deduction for such expenses. The expenses amount is up to RM3,000 per year effective YA2024 (RM2,400 in YA2023). In total, the company can apply a deduction of up to RM6,000 per year.
Separately, the same amount of childcare allowance received by the employee is also exempted from tax.
2) Employment of senior citizens, ex-convicts, parolees, supervised persons and ex-drug dependents
Companies can enjoy double tax deduction on remuneration paid to full-time employees who are:
- Senior citizen aged 60 years and above;
- Ex-convict;
- Parolee;
- Supervised person;or
- Ex-drug dependents.
The benefit is subject to the following:
- The remuneration does not exceed RM4,000 per month;
- The employer and employee are not the same person;
- The employer is not a relative of the employee.
In total, the company can apply a deduction of up to RM96,000 per year. This incentive is available to employers from YA2019 to YA2025.
3) Structured internship programme
Companies providing structured internship programme (SIP) to students to gain practical work experience in a specific field of their study can enjoy double deduction on the expenditure incurred. The requirements are:
- Monthly internship allowance of RM600 for Master’s Degree, Bachelor’s Degree and Professional Certificate or equivalent (Category A)
- Monthly internship allowance of RM500 for diploma / Malaysian Skills Certificate Level 1 to Level 5 or equivalent (Category B)
- Provide a minimum internship period of 10 weeks
- Provide an internship framework that include practical experience and emphasises the development of specific knowledge or skills for students and approved by TalentCorp
- Registered with Companies Commission of Malaysia or recognised entities.
In total, the company can apply a deduction of up to RM14,400 per year for Category A and RM12,000 per year for Category B.
Additionally, the Company can also apply a deduction of up to RM5,000 per year on expenditure incurred for the provision of training, meal, travelling, accommodation, digital and communication costs.
4) Employment of disabled employees
Companies can claim double deduction on remuneration paid to employees who are disabled.
5) Sponsorship of scholarship to students
Companies can claim double deduction for provision of scholarships to qualifying Malaysian students to pursue the following:
- Technical and vocational certificate;
- Diploma;
- Bachelor’s degree;
- Master’s degree;or
- Doctor of philosophy.
The scholarship agreement between the company and the employee must be executed between 1 January 2022 to 31 December 2025.
6) Halal certification, quality systems and standards certification
Companies can claim double deduction for expenses incurred in obtaining halal certification, quality systems and standards certification issued by an approved certification body e.g. SIRIM, JAKIM etc.
The list above is not exhaustive.
