Accelerated Capital Allowance for E-Invoice in Malaysia
To support taxpayers in modernising their systems and meeting the mandatory electronic invoice (“e-Invoice”) deadline, Income Tax (Accelerated Capital Allowance) (Information and Communication Technology Equipment for the Implementation of Electronic Invoice) Rules 2026 [P.U.(A) 162/2026] and Income Tax (Accelerated Capital Allowance)(Development Cost for Customised Computer Software for the Implementation of Electronic Invoice) Rules 2026 [P.U.(A) 163/2026] have been gazetted to provide accelerated capital allowance for expenditure incurred in relation to the implementation of electronic invoicing.
Both of the above will take effect from the year of assessment (“YA”) 2024 to YA2027.
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Income Tax (Accelerated Capital Allowance) (Information and Communication Technology Equipment for the Implementation of Electronic Invoice) Rules 2026 [P.U.(A) 162/2026]
Capital expenditure incurred for the purchase or installation of any information and communication technology (“ICT”) equipment for the implementation of electronic invoice for the purpose of business may claim for an accelerated capital allowance. The accelerated capital allowance rate is an initial allowance of 20% and an annual allowance of 40%.
The purchase of the following ICT equipment may qualify:
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Access Control System
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Banking System
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Bar Code Equipment
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Burster or Decollator
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Cable and Connector
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Computer-aided Design
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Computer-aided Manufacturing
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Computer-aided Engineering
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Card Reader
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Computer and Component
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Central Processing Unit
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Storage
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Screen
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Printer
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Scanner or Reader
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Accessories
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Communication and Network
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Software System or Software Package
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Income Tax (Accelerated Capital Allowance) (Development Cost for Customised Computer Software for the Implementation of Electronic Invoice) Rules 2026 [P.U.(A) 163/2026]
Any consultation fee, payment for rights of software ownership and incidental fee relating to the development of customised computer software for the purposes of development of electronic invoice system for business usage may claim for an accelerated capital allowance. The accelerated capital allowance rate is an initial allowance of 20% and an annual allowance of 40%.
The development cost for the customised computer software shall be deemed to be incurred in the basis period for a YA in which the customised computer software is capable being used for the business purposes.
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Eligibility Conditions
The person claiming the allowance must:
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Non-Application
The accelerated capital allowance incentive will not be applicable to taxpayers who have any purchase of any ICT equipment or development cost for customised computer software for the implementation of electronic invoice:
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Has been granted any incentive under the Promotion of Investments Act 1986;
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Has claimed any deduction under Section 33 of the Act;
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Has claimed any deduction under Section 34A of the Act;
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Has claimed any reinvestment allowance under Section 7A of the Act;
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Has claimed any investment allowance for service sector under Section 7B of the Act;
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Has claimed any accelerated capital allowance under any rules made under Section 154 of the Act; or
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Has been granted an exemption under Paragraph 127(3)(b) or Subsection 127(3A) of the Act in relation to statutory income of the person which is equivalent to any part or the whole of the amount of the capital expenditure for the implementation or development cost for customised computer software of electronic invoice incurred by the person.
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For further information, please visit the official website of the Inland Revenue Board of Malaysia at
https://www.hasil.gov.my/en/
KAIZEN Group, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.
KNOWLEDGE
