The Complete List of Claimable Business Expenses
- Chow Ping
- 2 days ago
- 4 min read
Every ringgit you don't claim is a ringgit you're voluntarily donating to LHDN for no reason.
We love LHDN ❤️
But let’s not give away free money.
If there’s a business expense you can claim a tax deduction for, claim it!
But before we get to the list of claimable business expenses, you need to understand the law LHDN operates by.
The Income Tax Act 1967 says an expense is deductible if it's "wholly and exclusively incurred in the production of income."
Translation: did you spend this money purely to run and grow your business? If yes, claim it.
If there's a personal element mixed in, you can only claim the business portion. If it's not related to earning income at all, don't even try.
Keep this test in your back pocket. We'll come back to it throughout this list.
The full list of claimable business expenses
1. People costs
Salaries, bonuses, commissions, allowances.
This includes director's salary too, as long as it's paid for actual work done for the company. On top of that, your statutory contributions (EPF, SOCSO, EIS) that you pay as the employer are also deductible.
Sending your staff for training or certifications that are relevant to their work? Also claimable.
2. Roof and wires
Office or shop rent, electricity, water, internet, phone lines. All fair game, as long as the space and services are used for business.
Working from home? You can still claim a portion. Say you use one room out of five exclusively for work, that's 20% of your rent and utilities you can claim.
3. Getting the word out
Marketing and advertising costs are deductible because they exist to generate revenue.
Facebook ads, Google ads, content creation, brochures, promotional events, website design and hosting. All of it counts.
4. Getting from A to B
Business travel, whether it's flights, taxis, or your own petrol, is deductible when it's for work purposes. So are tolls, parking, and accommodation while travelling for business.
If you use your personal car for both business and personal trips, you'll need to work out the business percentage based on mileage or usage, and only claim that portion.
5. The professionals you pay to keep you out of trouble
Accounting fees, audit fees, legal fees, company secretarial fees, tax agent fees. These are deductible because they're essential for running a compliant business.
Do note that secretarial fees and tax filing fees have specific permissible amounts set by LHDN, so it's worth checking the latest guidelines before assuming the full amount is claimable.
Need help with that?
6. Keeping the lights on
Office supplies, stationery, printing, and software subscriptions (accounting tools, design software, project management apps) are deductible.
Bigger purchases like computers, machinery, or vehicles work a little differently. You don't deduct the full cost in one go.
Instead, you claim it gradually through capital allowances, which is basically tax-friendly depreciation.
7. Fixing things
Repairing your office printer, servicing your air-con, general upkeep of equipment or premises. Deductible.
But if the "repair" actually improves or upgrades the asset beyond its original condition, it's no longer a repair in LHDN's eyes. It becomes capital expenditure, and that's a different category with different rules.
8. Protecting the business
Business insurance such as property insurance, stock-in-trade insurance, fire and flood coverage, and group medical insurance for employees are all deductible.
One thing to flag clearly: personal life insurance for a director is not deductible. The insurance has to cover the business or the employees, not you personally.
9. Money admin
Bank charges, transfer fees, credit card processing fees, postage and shipping. Small individually, but they add up over the year, and they're all claimable.
10. The generous stuff
Donations to LHDN-approved institutions are deductible, generally capped at 10% of your aggregate income for the year.
Small gifts to clients or customers can also be claimed, but if you're handing out lavish gifts, don't expect the full amount to pass review.
11. Feeding clients
Business meals and client entertainment are deductible, but only at 50%. LHDN built in this haircut specifically to stop people from disguising personal dining as "business expenses."
So if you take a client out for a RM1,000 dinner, only RM500 of that counts.
What LHDN will throw back in your face
Not everything qualifies as a claimable business expense. These are firmly off-limits:
Fines and penalties, including traffic summonses
Personal or domestic expenses (groceries, household bills, family meals)
Your own income tax payments
Capital expenditure such as buying a new building or machinery outright
Loan principal repayment (only the interest portion is deductible)
General provisions for doubtful debts
.
The grey zone: mixed-use expenses
Some expenses serve both your business and your personal life at the same time. Your phone bill, your car, your home internet.
In these cases, you can only claim the business-use portion. If your phone usage is roughly 70% business and 30% personal, you claim 70% of the bill. Not the full amount, and not zero either.
Keep a simple record of how you arrived at that percentage. It doesn't need to be complicated, but it does need to exist if LHDN ever asks.
Capital allowance vs. straight deduction
Not every big purchase is an immediate deduction.
If you buy an asset you'll use for years, like a laptop, a company car, or machinery, you don't get to write off the full cost in the year you bought it. Instead, you claim it bit by bit through capital allowances, spread across the useful life of the asset.
It's essentially tax-friendly depreciation, and the rates differ depending on what you bought. The key thing to remember is this: repairs restore an asset, capital expenditure upgrades it. The former can be deducted, but not the latter.
Receipts or it didn't happen
You can only claim what you can prove.
Keep your invoices, receipts, bank statements, and any supporting documents (contracts, quotes, proof of service) for at least seven years. LHDN can and does request these during an audit, and a legitimate expense with no paper trail is a legitimate expense you'll struggle to defend.
Want to focus on your business while we manage the boring paperwork for you?
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