PR 6/2006 Tax Treatment of Legal & Professional Expenses

Deductible
1. Debts collection – trade debts
2. Renewal of existing loans by finance company
3. Book keeping, accountancy work & audit fees
4. Renewal of lease incurred by landlord
5. Defending title to the property
6. Defending an action on trade in nature or breach of trading contracts
7. Legal cost on disputes over trading contracts
8. Cost incurred by property developer on financing facility, valuation of land, transfer of land titles, sub-division and conversion of land, survey fees
9. Renewal of leases and licenses
10. Legal fees & agency fees for employment agreements/trading contracts

Non-Deductible
1. Debts collection – non-trade debts
2. Renewal of loan
3. Secretarial fees, filling fees, AGM expenses
4. Income tax return, tax audit
5. Initial legal fees incurred by landlord
6. Defending a fraud case
7. Obtaining new leases, mortgages, loan or credit facilities etc
8. Cost incurred by property developer on obtaining bank overdraft, term loan, bridging finance & revaluation of land
9. Legal fees on increasing/reducing share capital or altering the M&A of company
10. Legal fees on acquisition of capital assets/sales/transfer of capital assets
11.Costs of leagal proceedings incurred in pursuing a claim for unlawful or unjust dismissal by an employee

Effective Ya2006 and subsequent years of assessment

Source: summarised from
http://www.hasil.gov.my/pdf/pdfam/PR6_2006.pdf