Double and Further Deduction Directory — Gazetted Income Tax Rules

Nobody publishes this as a list, and that is why claims go wrong. A finance manager reads a firm alert saying flexible work arrangements get a double deduction, claims 200%, and is wrong — since year of assessment 2025 the gazetted rule gives an extra 50%, not an extra 100%.

Double deduction in Malaysia is never a general principle. It exists only where the Income Tax Act 1967 says so, or where the Minister has gazetted Rules under s.154(1)(b) read with s.33(1)(d). Everything below was read off the gazetted instrument.

How to read a deduction order in ten seconds

Skip the title — it tells you nothing. Go to the amount subrule and look for one of three phrases.

Drafting	Effect
“twice the amount of expenses allowed under these Rules”	200% total
“shall be in addition to any deduction under section 33”	200% total, expressed the other way
“equivalent to fifty per cent … in addition to any deduction under section 33”	150% total
Neither phrase	Single deduction only — usually unlocking an item s.33 would otherwise block

Most instruments titled Income Tax (Deduction for …) Rules fall in the last row. They are not double deductions.

One caveat before you apply this mechanically: “200% total” is the uncapped reading. Where the same order sets a cap on the further deduction — as the employee-accommodation order does at RM50,000 per company — the second deduction is limited to that cap, so the total is s.33 plus the capped amount, not a clean doubling. Read the amount subrule and the cap together.

Statutory double deductions in the Act itself

Provision	Expenditure	Amount	Notes
s.34A	Research and development approved by the Minister	Twice the revenue expenditure	Overseas R&D above 30% of total R&D drops the claim back to single. No s.33 or s.34 deduction for the same spend
s.34B	Cash contribution to an approved research institute; payment for the services of an approved research institute, approved research company, R&D company or contract R&D company	Twice the revenue expenditure	Denied to a related company of an R&D company still inside its PIA s.27D approval window
s.34(6)(ma)	Obtaining certification for recognised quality systems and standards, and halal certification	Twice the revenue expenditure	Deemed incurred in the basis period the certificate is issued, not when paid

Gazetted double and further deductions

Confirmed against the gazette text. Status is as at the date on this page.

Incentive	Instrument	Qualifying expenditure	Amount and cap	Window / status
Scholarship to Malaysian students (TVET certificate, diploma, degree, professional certificate)	P.U.(A) 252/2026	Sponsorship expenses under a scholarship agreement	Twice	From YA2026
Scholarship (TVET to PhD levels)	P.U.(A) 49/2022	Sponsorship expenses	Twice	From YA2022
Scholarship, engineering and technology fields	P.U.(A) 468/2021	Sponsorship expenses	Twice	Deemed from YA2019
Scholarship, TVET certificate level	P.U.(A) 503/2021	Sponsorship expenses	Twice	Deemed from YA2015
Scholarship, higher-education student	P.U.(A) 228/2012	Sponsorship expenses	Twice	YA2011–YA2016, lapsed
Vendor Development Programme	P.U.(A) 2/2022	Anchor-company expenditure on the programme	Twice, capped RM500,000 per YA	From YA2021
Industry4WRD Vendor Development Programme	P.U.(A) 172/2022	Anchor-company expenditure	Twice, capped RM1,000,000 per YA	Deemed from YA2019
Vendor Development Programme (earlier)	P.U.(A) 169/2014	Anchor-company expenditure	Twice	From YA2014
Approved internship programme	P.U.(A) 398/2019	Internship expenditure, TalentCorp-approved	Twice, capped RM5,000 per student per YA	YA2015–YA2021, lapsed
Child care centre for employees	P.U.(A) 15/2013	Provision and maintenance of a centre registered under the Child Care Centre Act 1984, and child care allowance	In addition to s.33	From YA2013, no stated end
Employees accommodation	P.U.(A) 470/2021	Rental of premises used as employee accommodation	In addition to s.33, capped RM50,000 per company	From YA2021
Employment of senior citizens, ex-convicts, parolees, supervised persons, ex-drug dependants	P.U.(A) 164/2019, extended by P.U.(A) 47/2021	Remuneration of a Malaysian citizen resident employee, full time, wage not exceeding RM4,000	In addition to s.33	YA2019–YA2025, now lapsed
COVID-19 detection tests for employees	P.U.(A) 404/2021	Cost of testing	In addition to s.33	From YA2021
Freight charges, Sabah or Sarawak to Peninsular Malaysia	P.U.(A) 50/2000, revised edition P.U.(A) 383/2025	Freight charges on rattan and wood-based products, excluding sawn timber and veneer	Further deduction, in addition to s.33	In force; revised edition effective 30 October 2025
Promotion of international or private schools	P.U.(A) 110/2012	Overseas education fairs and listed promotion expenses	Additional to s.33, capped RM100,000 per YA for overseas fairs	From YA2012
Participation in an approved career fair	P.U.(A) 129/2012	Participation expenditure	Additional to s.33	YA2012–YA2016, lapsed
Interest and incidental cost of a loan to revive an abandoned housing project	P.U.(A) 89/2013	Interest and incidental cost	Twice	Loans approved 1 Jan 2013 – 31 Dec 2015
Consultation and training for flexible work arrangements	P.U.(A) 134/2015	Consultation and training costs	Twice	Deemed from YA2014
Flexible work arrangements	P.U.(A) 377/2021	Capacity development, training, software	Twice, capped RM500,000 per YA, three consecutive YAs	Deemed from YA2020
Flexible work arrangements (current)	P.U.(A) 225/2026	Capacity development, training, software	Extra 50% only, capped RM500,000, once	From YA2025; TalentCorp application 1 Jan 2025 – 31 Dec 2027
Issuance of retail debenture and retail sukuk	P.U.(A) 117/2019	The additional expenses of a retail issue	Twice the additional expenses	YA2019–YA2020, lapsed
Sukuk and retail sukuk structured on wakalah	P.U.(A) 5/2021	Issuance expenditure plus additional retail expenses	Expenditure, plus twice the additional expenses	YA2021–YA2025

The three flexible-work rules are mutually exclusive. Rule 3 of P.U.(A) 225/2026 disapplies it to any employer that has claimed under P.U.(A) 134/2015 or P.U.(A) 377/2021 in the same basis period.

Single deductions people mistake for double deductions

Instrument	What it actually does
P.U.(A) 232/2026 — rental of electric motor vehicles	Allows EV lease rentals up to an aggregate RM300,000 per vehicle, YA2023–YA2027. Claiming it blocks any claim under s.39(1)(k) or Schedule 3
P.U.(A) 31/2021 — smartphone, tablet or personal computer given to an employee	One-off single deduction, YA2020 only
P.U.(A) 269/2021 — personal protective equipment	Single deduction from 1 March 2020; blocked if capital allowances were claimed on the same item
P.U.(A) 222/2026 — handicraft purchases by rated hotels	Single deduction capped RM150,000 per YA, deemed in force from 1 January 2023
P.U.(A) 162/2026 and 163/2026 — e-Invoice ICT equipment and customised software	Accelerated capital allowance, not a deduction at all
P.U.(A) 375/2018 — payments to a Labuan company	The opposite: a deduction restriction

Common mistakes

Claiming an expired incentive. Windows are written into subrule 1(2) of each instrument and are easy to miss. The senior-citizen and ex-convict hiring deduction ran only to YA2025. The approved internship deduction ended at YA2021.

Assuming a firm alert reflects the current order. The flexible work arrangement deduction was halved when P.U.(A) 225/2026 replaced the 2021 rules, and most commentary still describes the old 200%.

Double-claiming the same ringgit. Nearly every instrument carries a non-application rule — s.34A(5), s.34B(3), rule 2(5) of P.U.(A) 232/2026, rule 4 of P.U.(A) 269/2021. Claim under the incentive or under s.33 and Schedule 3, never both.

Treating the deduction as pre-approved. Almost none of these need LHDN approval. Several need someone else’s certification — TalentCorp for internships and flexible work, MIDA or a ministry agency for vendor programmes, the Department of Social Welfare for a child care centre. Without that certificate the claim fails on audit even where the expenditure is genuine.

Ignoring the reasonableness override. Most orders let the Director General disallow anything above what would reasonably be expected in the ordinary course of business. Inflating a related-party training fee to double it is the fastest way to lose the whole claim.

What’s next

Check every incentive you claim against the gazetted instrument each year, not against last year’s working paper. Where an order has lapsed, the underlying expense normally remains deductible once under s.33 — you lose the bonus, not the expense.