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Special Tax Deduction for Rental Reduction for SME Tenants 2.0

Pursuant to PERMAI Assistance Package announced on 18 January 2021, special tax deduction granted to taxpayers who provide a rental reduction of at least 30% to their Small and Medium Enterprise ("SME") tenants has been extended to June 2021.

The same special reduction will now also be granted to non-SME tenants for the period starting from January 2021 to June 2021.

An updated FAQ dated 19 Feb 2021 has been issued by the Malaysian Inland Revenue Board ("MIRB"). Please click here for the FAQ which is self-explanatory.

Taxpayers who wish to claim this special deduction, must produce:

a. A valid tenancy agreement which has been stamped.

b. Rental income statement

c. The tenant’s SME Status Certificate issued by SME Corporation Malaysia up to 30 June 2021 must be kept as verification proof of the tenants' SME status.

d. Information about the tenant, tenancy and the reductions given.

e. Taxpayers must also complete and keep the prescribed Working Sheet (HK). The working sheet format will be provided by MIRB soon.

** Under Pemerkasa Assistance Package (Plus) announced on 2 June 2021, the period of claiming special deduction on rental discounts given by landlords of private business premises to SMEs and non-SME will be extended to 31 December 2021 (Updated on 2 June 2021).

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