Capital Allowances
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A1. CURRENT CAPITAL ALLOWANCES RATES FOR PLANT
A1. Standard rates
With effect from Y/A 2000 (cyb), capital allowances will be re-categorised into three classes and the rates of capital allowances are revised as follows:
Type of Asset |
Initial Allowance rate |
Annual Allowance rate |
| Heavy machinery and motor vehicles | 20% | 20% |
| Plant and machinery (general) | 20% | 14% |
| Others | 20% | 10% |
| Assets with a life span of not exceeding two years | - | Replacement basis |
| * Accelerated capital allowances (ACA) be given to ALL qualifying plant expenditure under Sch 3 of the Act incurred between the period of 10 March 2009 to 31 December 2010. This ACA does not apply to a person which has been granted incentives under the Promotion of Investments Act (PIA) 1986; reinvestment allowance; exemption under S.127(3)(b) or S.127(3A) of the ITA 1967; or who qualifies for an allowance at a higher rate under the ITA 1967. | 20% | 40% |
A2. SPECIAL RATES FOR PLANT
Type of Asset |
Initial Allowance |
Annual Allowance |
| Machinery and plant (other than imported heavy machinery) used in specific industries: |
||
|
30% 60% 60% |
10% 10% 10% |
| unless election made in writing | ||
| Plant and machinery used for recycling of wastes or for further processing of wastes into finished products. This accelerated capital allowance does not apply to a company which is granted incentives under PIA 1986 (except for deductions for promotion of exports), or granted reinvestment allowance [PU(A) 505] | 40% | 20% |
| Plant and machinery used for the purpose of a qualifying project in respect of a promoted activity. This accelerated capital allowance does not apply to a company which is granted reinvestment allowance, pioneer status or investment tax allowance, or where it fails to submit a confirmation letter from MIDA concerning the activity or products [PU(A) 506] | 40% | 20% |
| Plant and machinery used for conservation of energy. This accelerated capital allowance does not apply to a company which is granted incentives under the PIA 1986 (except for deductions for promotion of exports), or granted reinvestment allowance [PU(A) 82] | 40% | 20% |
| Qualifying expenditure on private motor vehicles restricted to: | ||
| RM50,000 | 20% | 20% |
| RM100,000 — applies only to new vehicle with total cost not exceeding RM150,000 purchased on or after 28 Oct 2000 | 20% | 20% |
| Accelerated capital allowance (ACA) on machinery and equipment used in the agricultural sector including plantations: Equipment eligible for ACA shall be determined by the Minister of Finance | 20% | 40% |
| ACA be given to small value assets not exceeding RM1,000 each but not exceeding a total value of RM10,000. (The maximum limit of RM10,000 is not applicable to small and medium enterprise (SME) with effect from the Y/A 2009) (Note: Taxpayers are given the option to either claim the ACA (100%) or the normal CA.) | - | 100% |
With effect from Y/A 2009, ACA be given to: (i) security control equipment [other than the Global Positioning System (GPS)] for a factory where the company is approved under the Industrial Co-ordination Act 1975 [Act 156]; or |
20% | 80% |
| (ii) any GPS for vehicle tracking for a container lorry of company bearing Carrier Licence A and for a cargo lorry of the company bearing Carrier Licence A or C issued under the Commercial Vehicles Licensing Board Act 1987 (Act 334). This ACA does not apply to a company which has been granted incentives under the PIA 1986; or reinvestment allowance. (Note: The rules are effective for the Y/A 2009 to 2012) | 20% | 80% |
| ACA be given to new buses used in the business of a bus operator. The bus shall be used for commercial transportation of passengers or conveyance of tourists; locally assembled or constructed, as defined in Motor Vehicles (Registration and Licensing) Rules 1959; and not a recondition bus. Bus specified in the Gazette Order are stage bus, charter bus, express bus, mini bus, employees bus, feeder bus, school bus and excursion bus. (Note: The rules are effective from the Y/A 2009 to 2011.) | 20% | 80% |
| SMEs be given ACA on ALL expenses incurred on plant and machinery that qualify for Sch 3 capital allowances. This ACA does not apply to a company which has been granted incentives under the PIA 1986; reinvestment allowance; or who qualified for an allowance under Para 19A of Sch 3 of the Act. (Note: The rules are effective for the Y/A 2009 to 2010.) | 20% | 80% |
| ACA be given to information and communication technology (ICT) equipment including computer and software. This ACA does not apply to a company which has been granted incentives under the PIA 1986; or reinvestment allowance. (Note: The rules are effective for the Y/A 2009 to 2013.) | 20% | 80% |
| ACA be given to expenses incurred on renovation or refurbishment of business premises between 10 March 2009 to 31 December 2010 which is prescribed by the Ministry of Finance. However, the amount of qualifying expenditure is restricted to RM100,000 for two years of assessment | - | 50% |
B. CAPITAL ALLOWANCES RATES FOR BUILDINGS
Type of Asset |
Initial Allowance |
Annual Allowance |
| Industrial buildings (standard rate unless special rates apply) | 10 | 3 |
| Capital expenditure on public roads and ancillary structures recoverable through toll collection | 10 | 6 |
| Building (self-constructed or purchased) for the provision of child care facilities (1 Jan 1994 onwards) | 0 | 10 |
| Building (self-constructed or purchased) used for providing living accommodation to employees by a person engaged in a: | ||
|
0 0 |
10 10 |
| Building (self-constructed or purchased) used for a school or an educational institution approved by the Minister of Education or any relevant authority or for the purposes of industrial, technical or vocational training approved by the Minister (Y/A 1996 onwards) | 0 | 10 |
| Building (self-constructed or purchased) used as warehouse for the storage of goods, for export or for the storage of imported goods to be processed and distributed or re-exported (Y/A 1998 onwards) | 0 | 10 |
| Building constructed pursuant to an agreement entered into with the Government on a build-lease-transfer basis on lease to the Government (Y/A 2000 (pyb) onwards) | 10 | 6 |
| Building (self-constructed or purchased) used as an old folks care centre approved by Social Welfare Department (21 Sep 2002 onwards) | 0 | 10 |
| Building (self-constructed or purchased) used solely for biotechnology research (Nil initial allowance) — 2007 Budget | 0 | 10 |
| Building constructed under a privatization project and private financing initiatives approved by the relevant authorities | 10 | 6 |
C. AGRICULTURAL ALLOWANCES RATES
Type of Asset |
Rate (fraction of Expenditure Incurred) |
| Capital expenditure incurred on: | |
|
1/2 1/2 1/2 1/5 1/10 |
D. FOREST ALLOWANCES RATES
Capital expenditure incurred on the construction in a forest of: |
Rate (fraction of Expenditure Incurred) |
|
1/10 |
|
1/5 |
(Extracted from 2012 Budget Commentary And Tax Information)