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BUSINESS EXPENSES (Expenses/Expenditure Deduction (SPECIFIC DEDUCTION…
BUSINESS EXPENSES
What
Gross income - Allowable Business Expenses = Adjusted Income
Affect income tax liability
Legislation
Conditions to secure deduction
'Wholly & Exclusively'
Exclusively - motive/object during incurrence (must sole purpose)
Case laws
Bentleys, Stokes and Lowless v Beeson
Robert Addie & Sons' Collieries Ltd v The CIR
Wholly - allowed of money expended
Principles of 'W & E' test
Motive
Direct purpose of business
Commercial expediency
Benefit to the third party
Classifications of accounts
Incurred
What
Money actually laid out - legal liability to pay arisen
Paid, payable or becoming payable
Expense deduction
In the basis year expenditure incurred
Accrual Expense
Provision ≠ Incurred
'Outgoings and expenses'
Expenses
Disbursements/payments
Involve volition
Outgoings
Businesses' loss
Trader - expends/disburse
comes 'ab extra'
In the production of gross income
Each business source - accounted separately
Expenses/Expenditure Deduction
GAZETTE ORDER
Statutory audit fees
Cost of developing website
Personal computes & Broadband Service
Incorporation Tax
IT Related
Chain of custody certification
Recruitment of employee
1-Innocent Certification
Secretarial fee and tax filing fee
Employees training cost on GST Implementation
Guarantee & Commitment Fees
SPECIFIC DEDUCTION
Provision of equipment and renovation of building for disabled person
Translation/Publication of book
Replanting expenditure
Provision of library facilities
Mining Expenditure
Social responsibility payment
Payroll and turnover tax
Child care centre
Musical & Cultural Group
Arts or cultural Activity
Scholarship expenses
Halal certification
Practical training to non-employees
International Standardization Activities
Bank Commission, Guarantee Fees
Keyman Insurance
Unsatisfactory employee
Defalcation by employees/directors
Cultural or Arts Show
Advances to employees
Cost of Issuance of Islamic Securities
Employer's contribution to approved schemes
Employee Benefits
Bad & Doubtful Debts
Identify specific debtors
Debts are partly/ wholly irrecoverable
Reasonably estimated to be bad
Patent and Trademark Registration
Repairs and renewals
Repair & Improvement Distinction
Tax Planning
General
Repairs on acquisition
Asset replacement - 'Entirely' or 'part of entirety'
Deduction of Discount Expenses
Rent
Treasury Shares
Interest expense
On money borrowed
On debt
Local Franchise Brand
Double deduction of expenses
Participation in an approved career fair
Freaight charges
Approved internship programme
Child care Centre
Scholarship to university students
Cash Contribution to Bantuan Pelajar Miskin 1 Malaysia Fund
Training cost to unemployed graduates
Vendor development programme
Minimum wages
Expenditure/Expenses disallowed
Capital expenditure
Identifiable asset
Business structure v process
Fixed capital and circulating capital
Initial expenditure
Enduring benefit asset
Legal & Professional Expenses
Cost of Tax Appeal
Violation of law
Damages
Advances to employees
Defalcation by employees/directors
SPECIFICALLY DISALLOWED
Capital withdrawn or any sum employed or intended to be employed as capital
Any amount in respect of any payment to any pension, provident, savings, widows and orphans or other similar fund or society which is not approved scheme
Disbursements or expenses not being money wholly and exclusively laid out or expended for the purpose of producing the gross income
Any expenditure incurred in relation to a business, being expenditure
Domestic or private expenses
Withholding tax
Sums payable for the use of a license or permit to extract timber from a forest in Malaysia other than sums payable to a State Government r statutory authority or body approved by the Minister
Lease Rental
Entertainment expenses
Leave passage
Anti avoidance to incentives company
Retrenchment
AGM Expenses