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  1. Capital Allowances. Accounting depreciation charged on buildings, plant and machinery, furniture, office equipment and motor vehicles is not deductible for tax purposes.

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  2. Capital allowances are allowed to a person who incurred qualifying expenditure (QE) on assets used for the purpose of his business and made a claim in writing in his Income Tax Return Form.

  3. Capital allowance for motor vehicle. Motor vehicle for Capital Allowance is classified into 2 categories. Passenger / private vehicle. Commercial vehicle (van, lorry, and bus) What is eligible for capital allowance? Eligible for capital allowance: Basic Accessories and registration fees which is required by the road transport department (RTD)

  4. Motor vehicles include all types of vehicles that are powered by motors or engines such as car, van, motorcycle, aircraft, boat, motorized bicycle and other similar vehicles.

  5. It allows a capital allowance at a higher rate than the normal capital allowance in a year of assessment and hence the total capital allowances can be fully claimed within a shorter period.

  6. In the case of motor vehicles, other than a motor vehicle licensed by the appropriate authority for commercial transportation of goods or passengers, the qualifying plant expenditure incurred shall be limited to a maximum of RM50,000 only.

  7. The annual allowance for motor vehicles is available at the accelerated rate of 20%, as compared to the rate of 14% for other plant or machinery. However, the QE is restricted to RM100,000 since it is a new non-commercial vehicle costing is not more than RM150,000.