Capital Allowances

What is the purpose of capital allowances (CA) in the context of taxation?

• To encourage individuals to invest in non-qualifying assets

• To discourage businesses from acquiring new assets

• To provide tax relief for personal expenses

• To provide tax relief for capital expenditures incurred in acquiring qualifying assets used for business purposes

What are the qualifying criteria for claiming capital allowances (CA)?

• The taxpayer must have a business source of income taxable under s.4(c) of the ITA

• The taxpayer must have a business source of income taxable under s.4(b) of the ITA

• The taxpayer must have a personal source of income taxable under s.4(a) of the ITA

• The taxpayer must have a business source of income taxable under s.4(a) of the ITA

What is the definition of 'plant' for the purpose of capital allowances?

• Any asset used for personal purposes, including buildings and intangible assets

• A building used for business purposes, including intangible assets

• An apparatus used by a person for carrying on his business, excluding buildings and intangible assets

• Any asset used for business purposes, including buildings and intangible assets

Under what conditions can a taxpayer claim initial allowance (IA)?

• The taxpayer has incurred QPE on a qualifying asset during the basis period, and the asset must be in use for business purposes

• The taxpayer has incurred QPE on a qualifying asset during the basis period, and the asset must be in use for personal purposes

• The taxpayer has not incurred any QPE during the basis period

• The taxpayer has incurred QPE on a non-qualifying asset during the basis period, and the asset must be in use for business purposes

When can a taxpayer start to claim capital allowances for plant and machinery acquired after the business has commenced?

• When the plant or machinery is capable of being used in the business

• When the plant or machinery is fully paid for

• When the plant or machinery is installed in the business premises

• When the plant or machinery is delivered to the business premises

What type of assets are excluded from qualifying as plant expenditures (QPE)?

• Assets with a lifespan of not exceeding two years

• Assets used for business purposes

• Assets used for personal purposes

• Assets with a lifespan of more than two years

What is the maximum qualifying plant expenditure (QPE) for non-commercial vehicles?

• RM 150,000 per vehicle

• RM 200,000 per vehicle

• RM 100,000 per vehicle

• RM 50,000 per vehicle

What is the treatment of foreign exchange differences for qualifying plant expenditures (QPE)?

• Realized forex gains and losses will not be considered in the computation of QPE

• Realized forex gains and losses will be fully deducted from the QPE

• Realized forex gains will be added to the residual expenditure, and realized forex losses will be deducted from the residual expenditure

• Realized forex gains will be deducted from the residual expenditure, and realized forex losses will be added to the residual expenditure

Under what conditions can a taxpayer claim capital allowances for assets acquired under hire purchase?

• The taxpayer is not deemed as the owner of the asset, and the QPE includes the capital portion of the instalment payments plus any deposit payment made

• The taxpayer is deemed as the owner of the asset, and the QPE includes the capital portion of the instalment payments plus any deposit payment made

• The taxpayer is deemed as the owner of the asset, and the QPE includes the interest portion of the instalment payments

• The taxpayer is not deemed as the owner of the asset, and the QPE includes the interest portion of the instalment payments

What is the timing of claiming capital allowances for plant and machinery acquired prior to the commencement of business?

• CA can start to be claimed when the plant or machinery is fully paid for

• CA can start to be claimed when the plant or machinery is capable of being used in the business

• CA can start to be claimed when the plant or machinery is installed in the business premises

• CA can start to be claimed in the first basis period (i.e. in the first YA)