Malaysia consults on speed-limiter capital-allowance guidance

New guidance on an existing regime

The proposed fourth edition adds section 7.13 and two examples to the earlier ruling, Public Ruling No. 6/2022 of 22 December 2022. It explains the Income Tax (Accelerated Capital Allowance) (Speed Limitation Device) Rules 2025, P.U. (A) 476/2025, rather than proposing new allowance rates.^[2][3]

Fleet and expenditure conditions

The Rules, gazetted on 31 December 2025, specify 20% initial and 80% annual allowances for qualifying business purchases by Malaysian residents. Devices must be installed during 2026 in commercial vehicles manufactured before 2015: goods vehicles with gross vehicle weight above 3,500kg, or public-service vehicles with gross vehicle weight above 5,000kg carrying more than eight passengers excluding the driver. Installation requires certification by a body recognised by the Road Transport Department; replacement devices are excluded.^[4]

Rule 4(2) limits the purchase to RM4,000 per unit. The draft describes this as a qualifying-expenditure ceiling; it should not be read as expressly allowing a capped deduction for a more expensive device. For hire purchase, rule 5 counts the capital portions of instalments paid in the relevant basis period.^[2][4]

Expenditure-specific exclusions

Rule 8 attaches its exclusions to the qualifying expenditure, covering specified investment allowances, reinvestment allowance, other accelerated allowances and expenditure-linked exemptions. The original rule does not state a blanket prohibition simply because a group has an unrelated incentive.^[4]

The draft’s section 7.13.7 uses broader current-period language. That wording needs clarification against rule 8’s expenditure-specific limitation, rather than expansion by inference.^[2][4]

For multinational groups with Malaysian vehicle fleets, the consultation offers an opportunity to clarify the purchase-limit and overlapping-incentive wording before final guidance.^[1][2]