The year-end tax relief window is closing fast
PETALING JAYA: With only a few days left before 2025 ends, tax experts urge taxpayers to take urgent action now to secure any remaining tax reliefs. The critical point is clear: only expenses paid by December 31 will qualify for the 2025 assessment year, not commitments or promises to spend later.
KPMG Malaysia senior tax policy adviser Dr Veerinderjeet Singh encourages Malaysians to adopt a proactive mindset, setting December 31 as the real deadline rather than waiting for the tax filing season next year. “Start the panic before the year is over. That pushes you to gather receipts and documents,” he noted. “Once everything is in place, you’ll be ready to substantiate your eligibility for relief when you file early next year.” He also acknowledged that late-year planning has limited scope given the remaining two weeks, but highlighted several core reliefs that can still be claimed if action is taken immediately.
One such relief is the private retirement scheme (PRS), which offers up to RM3,000 in tax relief for individuals who invest before December 31. “If you continue investing before year-end in a unit trust or approved private retirement schemes, you can still claim the RM3,000 relief,” Veerinderjeet explained.
Medical-related reliefs also present opportunities, including medical expenses or check-up costs up to RM1,000 as well as vaccination expenses. Veerinderjeet added that lifestyle relief should not be overlooked, since it covers purchases such as books, electronic gadgets, tablets, and computers, with a cap of RM2,500.
Tax advisor Datin Christine Koh warned that many taxpayers wrongly assume that commitments made before year-end—like signing up for services or intending to make purchases—are enough for relief claims. In reality, reliefs require actual expenses incurred by midnight on December 31. “Tax reliefs must be incurred to be claimable. Mere intention or commitment does not qualify,” she said, advising taxpayers to rely on the Inland Revenue Board (LHDN) website for precise and up-to-date information.
Koh recommended reviewing the official list of reliefs to identify which have not yet been incurred, stressing that payments must be made by year-end to claim them. She noted several new or expanded reliefs for 2025, including medical treatment relief that now covers grandparents, relief for sports equipment purchased for parents, and a tax relief of up to RM2,500 for food waste composting machines. She also highlighted common pitfalls for married couples, particularly with National Education Savings Scheme (SSPN) and childcare reliefs, which can only be claimed by one parent even if both contributed.
Self-employed taxpayers may also benefit. Tax expert Renganathan Kannan said voluntary Employees Provident Fund contributions can yield relief of up to RM4,000, separate from the RM7,000 cap for mandatory EPF and life insurance. Net deposits into SSPN accounts remain eligible for relief up to RM8,000. He added that lifestyle reliefs, such as newspaper subscriptions, fall under a single RM2,500 cap and require careful planning to maximize benefits.
For SMEs, the focus should be on optimizing the tax system rather than merely scrambling to finish the year. Datuk William Ng, president of the Small and Medium Enterprises Association of Malaysia, notes that many SME owners rush to bring forward expenses—maintenance work, software subscriptions, professional fees, or staff-related costs—in order to book them in the current year. Others finalize bonus payments or settle outstanding liabilities at the last minute.
Ng cautions that late-stage opportunities are mostly timing-based. More substantial advantages, such as capital allowances, automation incentives, or restructuring remuneration, typically require planning months in advance. He also points to ongoing issues like weak documentation and late awareness of tax exposure, underscoring the need for regular financial reviews rather than treating the accounts as a once-a-year compliance exercise. SMEs that monitor their numbers earlier gain the opportunity to plan reinvestments, upgrade equipment, automate processes, or restructure costs in ways that boost productivity as well as reduce taxes.
In short, as December 31 approaches, taxpayers should act decisively to verify incurred expenses, consult official guidelines, and align their year-end payments with the reliefs they intend to claim. The best results come from timely planning and thorough record-keeping throughout the year, not from last-minute scrambling.
Would you like this rewritten version tailored for a specific audience, such as individual taxpayers, small business owners, or financial professionals? Also, should I adjust the tone to be more formal or more conversational?
