As a business owner in Malaysia, every ringgit counts. One of the best ways to lower your taxable income is by making sure you claim all your eligible business expenses.
But what actually qualifies as a business expense? And what should you avoid claiming?
In this guide, we’ll walk through what Malaysian businesses can and cannot claim, how to do it right, and why it matters to your bottom line.
Table of Contents
🕒 Estimated reading time: 5–6 minutes
What Are Business Expenses?
Business expenses are costs you incur to operate and grow your business. These are legitimate, necessary costs that support your operations and are typically deductible under Malaysian tax law.
This applies whether you run a Sdn Bhd, Sole Proprietorship, Partnership, or LLP.
To qualify as deductible, expenses must be:
- Directly related to the running of your business
- Incurred to generate taxable income
- Supported with proper documentation like receipts or invoices
Common Allowable Business Expenses in Malaysia
Here are the most common expenses Malaysian business owners can claim:
Office Expenses
- Rent for office or shop
- Electricity, water, and internet bills
- Office supplies and cleaning
Employee Costs
- Wages and salaries
- EPF, SOCSO, and EIS contributions
- Staff bonuses, training, or medical benefits
Professional Services
- Accounting and audit fees
- Company secretary and legal services
- Business consulting
Marketing & Promotion
- Social media and online ads
- Printing brochures and business cards
- Branding and website development
Business Travel and Transport
- Grab or taxi rides for meetings
- Petrol, toll, and parking for business trips
- Flights and hotels for work-related travel
Tools & Subscriptions
- Computers, phones, and printers
- Software and cloud services
- Office furniture and basic tools
Financial Charges
- Bank fees and transaction charges
- Loan interest on business financing
- Credit card processing fees
Each claim must be tied clearly to your business. Keep original receipts, digital invoices, or bank proof to support your claims.
What You Shouldn’t Claim
Even if your expense is legitimate, LHDN may reject it if your records are incomplete.
Always keep:
- Receipts or invoices with business names
- Proof of payment (e.g., bank transfer, statement)
- Notes explaining the purpose of the expense (if needed)
A cloud-based accounting system or outsourced bookkeeping can help simplify this, especially for Sdn Bhd companies that face stricter compliance requirements.
Final Thoughts
Knowing what you can and can’t claim as a business expense helps you stay compliant and save on taxes. But more importantly, it gives you a clearer picture of your business health.
If you’re unsure about a specific expense, don’t leave it to guesswork. It’s better to ask early than fix mistakes during an audit.
Need Accounting Help?
At Firm Care Management Services, we help Malaysian business owners manage their finances with clarity and confidence. Our accounting services are tailored for startups, SMEs, and growing companies that want practical support without unnecessary complexity.
Get in touch with us to see how we can support your business journey.
Grow
your business
with our expertise
Outsourcing your accounting services to Firm Care Management Services Sdn Bhd offers several advantages, allowing you to focus on growing your business while we handle the complexities of financial management.
Grow your business with our expertise
Outsourcing your accounting services to Firm Care Management Services Sdn Bhd offers several advantages, allowing you to focus on growing your business while we handle the complexities of financial management.