What Business Expenses Are Actually Tax-Deductible

What Business Expenses Are Actually Tax-Deductible

Every year around tax season, we get the same questions:

“Can I claim my car?”
“Lunch with client can deduct ah?”
“Phone bill also count or not?”

The truth is — yes, but only if it’s genuinely used for the business.
LHDN doesn’t look at what you paid, they look at why you paid it.

Let’s make this simple 👇

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💡 1. Expenses That Are Clearly Deductible

These are costs that directly help you earn business income — and are usually safe to claim:

✅ Business operations – rent, utilities, stationery, software subscriptions, internet, phone bills.
✅ Staff costs – salaries, EPF, SOCSO, EIS, staff insurance, allowances.
✅ Professional fees – accountant, company secretary, tax agent, legal fees (for business matters).
✅ Marketing – advertising, printing, website hosting, domain renewals, Facebook or Google ads.
✅ Travel – business mileage, toll, parking, flights, accommodation for business purposes.
✅ Training – staff courses, seminars, workshops that improve work skills.

If the expense helps your company run or generate revenue, it’s usually deductible.

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🚫 2. Expenses That Are Not Deductible

These are common traps that business owners often assume they can claim:

❌ Personal or family expenses – groceries, family dinners, children’s school fees, personal cars.
❌ Capital items – laptops, furniture, machinery — these are claimed through capital allowance, not direct deduction.
❌ Fines and penalties – LHDN or SSM penalties can’t be deducted.
❌ Donations (unless approved) – only contributions to approved institutions are claimable.
❌ Entertainment (for yourself) – meals or gifts for directors/owners are non-deductible.

Just because it’s paid through the business account doesn’t mean it’s deductible.

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⚖️ 3. The Grey Area — ‘Entertainment’ Expenses

This one’s always tricky.
LHDN splits “entertainment” into deductible and non-deductible parts.

✅ Deductible: meals for clients, festive hampers for customers, business event sponsorships.
❌ Non-deductible: entertainment for directors, staff outings, personal celebrations.

Keep a record of who and why — a simple note on the receipt helps your accountant classify it correctly.

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🧾 4. Keep Proof — Always

Even if your expense is valid, LHDN can reject it if there’s no documentation.
That means:

• Keep receipts or invoices.
• Write the reason (e.g., “Lunch with client – project discussion”).
• Snap photos or store them digitally — no more missing bills.

No receipt = no deduction. Simple as that.

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💬 5. The Secret to Claiming Smart (Not Risky)

The goal isn’t to “claim everything.”
It’s to claim everything you’re allowed to, properly.

At Trust Maven®, our accountants review every expense category and tag them correctly — so your tax submissions are clean, defensible, and fully optimised.

We don’t take action unless you engage us officially, but we do offer a consultation session at RM49/hour (waived if you engage our services) to check if your company’s claims are in order before your next filing.

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💬 Final Thoughts

Tax isn’t about luck — it’s about knowing the rules.
When you understand what counts as deductible, you can plan ahead and save more confidently.

At Trust Maven®, we help SMEs stay compliant and smart — every claim, every receipt, every ringgit done properly.

“Don’t fear LHDN — just be ready for them.”

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💌 Not sure if your company’s expenses are claimed the right way?
Schedule a RM49/hour consultation with Trust Maven® — we’ll walk you through your accounts, explain what’s safe to claim, and clear your doubts.
‍And if you decide to engage us, the consultation fee is on us.