Revenue
Revenue expenditure
Day-to-day operating costs — rent, salaries, fuel, marketing. Fully deductible in the current year.
Form B allowable expenses, Malaysia 2026.
A complete guide to deductible expenses for traders, freelancers and the self-employed. Know what you can and CANNOT claim to reduce your tax.
- Allowable categories11
- Not allowed8
- Keep records7 years
- ReferenceSection 33(1) ITA 1967
What are allowable expenses?
The cost of running your business.
Allowable expenses are costs incurred wholly and exclusively in running your business. They are deducted from gross business income so you are taxed on a lower chargeable income.
Revenue or capital
Two kinds of expense, two ways to deduct.
Capital
Capital expenditure
Asset purchases — computers, vehicles, machinery. Not deductible in one go. Use Capital Allowance.
Allowable expenses
Everything below can be deducted from your gross business income in Form B. Keep the receipts as proof.
Allowed
Cost of Goods Sold
- Stock / goods bought for resale
- Raw materials for production
- Inbound shipping (freight-in)
- Packaging materials
- Import costs and customs duty on goods
Allowed
Staff Salaries & Wages
- Staff salaries and wages
- Employer EPF contributions (12–13%)
- Employer SOCSO & EIS contributions
- Staff allowances (transport, meals)
- Staff bonuses and incentives
- Staff sales commissions
Allowed
Rent & Utilities
- Business premises / office rent
- Office electricity and water bills
- Business phone and internet bills
- Equipment / machine rental
- Working from home: claim the share used for work (proportional)
Allowed
Travel & Transport
- Fuel and tolls (business trips only)
- Business-related parking
- Taxi / e-hailing fares for work
- Outstation accommodation (reasonable)
- Flights for business trips
- Staff travel allowances
Allowed
Office Supplies
- Stationery, paper, ink and toner
- Small office supplies
- Printing
- Note: large equipment (computers, machines) → goes under Capital Allowance, not here
Allowed
Marketing & Promotion
- Online ads (Facebook Ads, Google Ads, TikTok Ads)
- Promotional materials — banners, flyers, buntings
- Website hosting and domain
- Business cards and branding materials
- Influencer / endorsement costs
- Exhibition costs
Allowed
Professional Fees
- Accounting and audit fees
- Legal fees (business-related)
- Consulting fees
- Accounting software (subscription)
- SSM renewal fees (annual)
- Bank and payment processing fees
Allowed
Business Insurance
- Premises fire insurance
- Business vehicle insurance
- Professional liability insurance
- Stock / goods insurance
- Staff insurance (group insurance)
Allowed
Maintenance & Repairs
- Premises repairs (repair — not renovation)
- Business vehicle servicing and maintenance
- Equipment and machine maintenance
- Note: renovation = capital expenditure, CANNOT be claimed here
Allowed
Bad Debts
- Debts confirmed as uncollectable
- Must have proof that collection was attempted
- Must have been declared as income first before it can be claimed
Allowed
Loan Interest
- Business loan interest (bank loan interest)
- Business overdraft interest
- NOT principal repayment — interest only
- The loan MUST be for business purposes
Expenses NOT allowed
Don't claim these — LHDN can penalise you.
Personal expenses
Your own meals, personal clothing, family groceries
Fines & penalties
Traffic summonses, LHDN compounds, late payment penalties
Donations & gifts
These go under tax rebates, not business expenses
Capital expenditure
New assets, premises renovation — claim via Capital Allowance
Provisions
Estimates of expenses that have not happened yet
Payments without proof
No receipt or invoice = cannot claim
Entertainment
Except to promote your own products or for company events
Payments to yourself
A sole proprietor's own salary is not deductible
Capital allowance
Business asset purchases are not deducted as ordinary expenses. Use these capital allowance rates instead.
| Asset type | Initial allowance | Annual allowance | Note |
|---|---|---|---|
| Computers & IT equipment | 40% | 20% | Fully claimed in ~3 years |
| Vehicles (non-commercial) | 20% | 20% | Capped at RM100,000 |
| Commercial vehicles | 20% | 20% | Capped at RM200,000 |
| Office furniture & fittings | 20% | 10% | |
| Plant & machinery | 20% | 14% | |
| Industrial buildings | 10% | 3% |
Example: buy a laptop for RM4,000. Year 1: claim RM1,600 (40% initial allowance). Year 2: claim RM800 (20% annual allowance). Year 3: claim RM800. Year 4: the remaining RM800. Fully claimed over 4 years.
Record-keeping tips
Tidy records, easy audits.
- 01
Keep Receipts for 7 Years
LHDN can audit within 7 years. Keep every receipt, invoice and bank statement as proof. - 02
Separate Your Bank Accounts
Use separate bank accounts for business and personal. Easier to track and easier to audit. - 03
Digital Records Are Safer
Paper receipts fade and get lost. Scan or snap your receipts and store them in the cloud. - 04
Note the Purpose of Each Expense
For every receipt, note the business purpose. Example: 'Client lunch — ABC project discussion'. - 05
Track Monthly, Not Yearly
Record every month. Don't wait for year end — it's easy to miss things and make mistakes. - 06
Use CukaiMax
Scan receipts with CukaiMax — it categorises expenses and keeps a digital backup automatically.
Don't forget personal tax relief
Traders and the self-employed can claim the same personal reliefs as salaried employees.
| Relief | Maximum |
|---|---|
| Individual & dependent relatives | RM9,000 |
| Spouse | RM4,000 |
| Child under 18 | RM2,000 / child |
| Child 18+ (higher education) | RM8,000 / child |
| EPF / retirement scheme | RM4,000 |
| Life insurance / takaful | RM3,000 |
| Education & medical insurance | RM3,000 |
| SSPN (education savings) | RM8,000 |
| Parents' medical | RM8,000 |
| Lifestyle (books, gadgets, internet) | RM2,500 |
| Sports & physical activity | RM1,000 |
| Serious disease medical | RM10,000 |
| Childcare / kindergarten fees | RM3,000 |
| PRS / deferred annuity | RM3,000 |
| Breastfeeding equipment | RM1,000 |
| EV charging equipment | RM2,500 |
Pro tip: many traders forget personal reliefs because they focus only on business expenses. Scan personal receipts (childcare, medical, gym) in CukaiMax to maximise your reliefs.
Questions
About Form B expenses
Generally, LHDN treats entertainment as NOT allowable. But if the meal or event is directly tied to promoting your products or an official company event, you can claim it. Keep the receipt and note the purpose.
Related guides
Guide
Form B
Form B guide for business income
Guide
Freelancer Tax Guide
Tax for freelancers
Guide
Grab Driver Tax
Deductible e-hailing expenses
Guide
Tax Relief 2026
Complete tax relief list
Official sources
LHDN · updated 2026
LHDN — Business Income
Business income and allowable expenses guidance
LHDN · updated 2026
LHDN — Individual Tax Relief
Individual tax relief list
LHDN · updated 2026
LHDN — Capital Allowance
Capital allowance guidance and rates
LHDN · updated 2026
Income Tax Act 1967
Section 33 — Allowable expenses
Start tracking your business expenses.
CukaiMax scans your receipts, categorises expenses and shows how much tax you can save. Free plan: unlimited receipt uploads. Personal: RM99/year for full exports, the audit pack, and email forwarding.
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