Office Furniture Depreciation & Tax Deduction Malaysia (LHDN Guide 2026)

3 days ago

2 min read

Malaysian businesses can claim office furniture as capital allowance under LHDN tax rules: 20% initial allowance in year of purchase + 10% annual allowance for subsequent years. This effectively writes off the full furniture cost over approximately 8 years. Furniture qualifies as 'plant and machinery' under Schedule 3 of the Income Tax Act 1967, providing significant tax savings for SMEs.

LHDN Capital Allowance Rates (2026)

Initial Allowance: 20% in year of purchase
Annual Allowance: 10% every subsequent year
Effective write-off period: 8 years
Applies to: office desks, chairs, storage, meeting tables, workstations
Includes installation and delivery costs

How to Claim Office Furniture as Tax Deduction

Keep original tax invoice and delivery order
Record asset in Capital Allowance Schedule (Form CP204)
Include in Form C (Company) or Form B (Business) tax return
Retain records for 7 years
Submit via LHDN e-Filing

Example: RM30,000 Furniture Purchase

Year 1 (Initial): RM6,000 (20%)
Year 1 (Annual): RM3,000 (10%)
Year 1 Total Allowance: RM9,000
Year 2-8 Annual: RM3,000 each year
Total 8-year write-off: RM30,000

What Qualifies vs What Doesn't

DOES NOT QUALIFY (treated as revenue expense): consumables like stationery, minor repairs and touch-ups, office decorations under RM2,000, plants and flowers.

Frequently Asked Questions

Can I claim office furniture as tax deduction in Malaysia?

Yes - LHDN allows 20% initial + 10% annual capital allowance on office furniture. Full cost written off over 8 years. Applies to desks, chairs, cabinets, meeting tables, and workstations.

What tax rate applies to office furniture depreciation?

Under Schedule 3 of Income Tax Act 1967, office furniture qualifies as 'plant and machinery'. Initial Allowance 20% in year of purchase + Annual Allowance 10% every subsequent year.

How to claim capital allowance for office furniture?

Keep tax invoice, record in Capital Allowance Schedule, include in Form C or Form B tax return, submit via LHDN e-Filing. Retain records for 7 years.

Do I need to depreciate small furniture purchases separately?

Yes - each qualifying item is tracked individually in your Capital Allowance Schedule. Group similar items (e.g., 10 desks bought together) as a single asset if they were purchased in the same tax year.