Kuala lumpur: The Inland Revenue Board of Malaysia (LHDN) has issued a reminder to individuals operating businesses to carefully manage the submission of claims for business expenses through the Income Tax Return Form, also known as Form B. The emphasis is on ensuring that only expenses directly related to business operations and activities are claimed.

According to BERNAMA News Agency, Mohamad Nasir Mohamed Nazri, a senior executive from LHDN's Corporate Services Department, highlighted the importance of distinguishing between business and personal expenses. He stressed that accurate tax reporting is crucial to facilitate a smooth assessment process and to avoid potential enforcement actions in the future.

Mohamad Nasir explained that allowable expenses must meet specific criteria, such as being definite, actually incurred, and not necessarily involving cash outflows. Examples include providing product samples to customers and losses from employee misconduct. He added that expenses must be incurred wholly for income generation, such as employee salaries, raw material purchases, premises rental, and utility bills.

He also noted that claims could be made for expenses within the business period of the same year, even if unpaid, like credit purchases, and for expenses incurred to generate gross income even if the income is not yet earned in the same year.

Addressing disallowed expenses, Mohamad Nasir pointed out that these include personal expenses, owners' salaries, capital expenditure, business asset purchases, start-up costs, depreciation, and other specified costs. He clarified that tax calculations differ from business profit and loss statements, with provisions for carrying forward losses to future years.

Furthermore, Mohamad Nasir reminded taxpayers to submit Form B or e-B for the Year of Assessment 2025 by July 15, 2026, using the MyTax portal's e-Filing service. Failure to comply could lead to prosecution and business audits. He advised those unsure about tax calculations or form-filling procedures to seek assistance through the official HASiL portal, the HASiL Contact Centre, or by visiting a HASiL office.