𝐒𝐨𝐥𝐞 𝐩𝐫𝐨𝐩𝐫𝐢𝐞𝐭𝐨𝐫 𝐜𝐨𝐦𝐩𝐚𝐧𝐲, 𝐜𝐚𝐧 𝐈 𝐝𝐞𝐝𝐮𝐜𝐭 𝐭𝐚𝐱 𝐚𝐟𝐭𝐞𝐫 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚 𝐩𝐚𝐬𝐬𝐞𝐧𝐠𝐞𝐫 𝐜𝐚𝐫?

Qualifying expenditure for motor vehicle Malaysia

𝐒𝐨𝐥𝐞 𝐩𝐫𝐨𝐩𝐫𝐢𝐞𝐭𝐨𝐫 𝐜𝐨𝐦𝐩𝐚𝐧𝐲, 𝐜𝐚𝐧 𝐈 𝐝𝐞𝐝𝐮𝐜𝐭 𝐭𝐚𝐱 𝐚𝐟𝐭𝐞𝐫 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚 𝐩𝐚𝐬𝐬𝐞𝐧𝐠𝐞𝐫 𝐜𝐚𝐫?

1. 𝐘𝐞𝐬, as long as the motor vehicle is used for business purpose by refer to PR5/2014 paragraph 13.

However, if the motor vehicle is partly used for business purpose only (eg. there is private usage), the capital allowance claimed has to be apportioned according to its usage.

2. However, according to PR 6/2015 para 5.2(b), 𝐭𝐡𝐞𝐫𝐞 𝐢𝐬 𝐫𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐢𝐨𝐧 𝐨𝐧 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐚𝐥𝐥𝐨𝐰𝐚𝐧𝐜𝐞 𝐜𝐥𝐚𝐢𝐦𝐞𝐝 𝐟𝐨𝐫 𝐩𝐚𝐬𝐬𝐞𝐧𝐠𝐞𝐫 𝐜𝐚𝐫.

New passenger car + RM100,000 < Cost < RM150,000 – restricted to RM100,000

New passenger car + Cost > RM150,000 – restricted to RM50,000

Reconditioned (secondhand) passenger car – restricted to RM50,000

3. For 𝐞𝐱𝐩𝐞𝐧𝐬𝐞 𝐢𝐧𝐜𝐮𝐫𝐫𝐞𝐝 𝐰𝐡𝐢𝐜𝐡 𝐢𝐬 𝐰𝐡𝐨𝐥𝐥𝐲 𝐚𝐧𝐝 𝐞𝐱𝐜𝐥𝐮𝐬𝐢𝐯𝐞𝐥𝐲 𝐢𝐧𝐜𝐮𝐫𝐫𝐞𝐝 𝐢𝐧 𝐭𝐡𝐞 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐨𝐟 𝐢𝐧𝐜𝐨𝐦𝐞 𝐢𝐬 𝐚𝐥𝐥𝐨𝐰𝐞𝐝 𝐟𝐨𝐫 𝐭𝐚𝐱 𝐝𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧.

However, if there is any portion of expenses which is not related to business purpose, the portion shall not allowed for tax deduction.

IRB argue taxpayer's motor vehicle is private use on weekend, driving from home to office and driving from office to home.

In normal circumstance, IRB will use 1/3 of the total expenditure and capital allowance as private usage.

Source

1. Paragraph 13 and 13.2 of Public ruling 5/2014 Ownership and use of asset for the purpose of claiming capital allowances

A beneficial owner or legal owner is entitled to claim the full portion of capital allowance if the asset is used wholly and exclusively for business purposes.

If the asset is also used for purposes other than business purpose, the owner is only entitled to a portion of the capital allowances (which used for the business).

2. Paragraph 5.2 (b) of Public ruling 6/2015 Qualifying expenditure and computation of capital allowances - Restriction on capital allowance claimed for passenger car.

3. Section 39(1)(a) of Income Tax Act 1967 - Private expenses

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