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Revised Special Guidelines: Income Tax Deduction for Community/Charity Projects to curb Covid-19

The announcement that contributions (in cash or in-kind) to overcome the COVID-19 outbreak is allowed for deduction under s 34(6)(h) of the Income Tax Act was made by the Government on March 23, 2020.

A guideline was then issued by the Ministry of Finance (MOF) to explain the conditions and procedures in such claims.

Further, donations made to vaccination centres (PPVs) would be eligible for tax deductions under the provisions of the National People's Well-Being and Economic Recovery Package (PEMULIH).

As a result of this announcement, the guideline issued by the MOF was updated on 2 August 2021 to include contributions to PPVs under s 34(6)(h).

The Ministry of Finance (MOF) has revised the guidelines published on its website on April 1, 2022, regarding Income Tax Deduction for Community/Charity Projects to curb Covid-19 under Section 34(6)(h) of the Income Tax Act.

The Guidelines are in Bahasa Malaysia and are named "Garis Panduan Khas Permohonan Potongan Cukai Bagi Projek Komunity/Amal untuk Menangani Wabak Covid-19" (Guidelines).

The Guidelines can be found here:-

.1 Garis Panduan Khas Permohonan Potongan Cukai Bagi Projek Komunity_Amal untuk Menanga

The Guidelines apply to contributions made from April 1, 2022, to December 31, 2022.

Key Updates

1. Qualifying contributions

Under the Revised Special Guidelines, Qualifying contributions are now limited to:-

  • Equipment - ventilators, beds, air-conditioners and air purifier/filtration

  • Consumables - masks, hand sanitisers, gloves, test kits and personal protective equipment

Under the revised Special Guidelines, the following are no longer considered qualifying contributions and have been taken off the list of qualifying contributions:

  • Cash

  • Raw food ingredients and ready-to-eat foods

  • Sanitisation services, provision of portable toilets, costs of delivery of supplies

  • Sponsorships such as the provision of permanent or temporary site infrastructure (e.g. marquee tents)

  • Provision of COVID-1 9 vaccination facilities such as halls, equipment and supplies in respect of PPVs

2. Qualifying Recipients

Under the Revised Special Guidelines, the donees are restricted to the following:

  • Government departments//agencies

  • Public hospitals

  • Public schools

Under the revised Special Guidelines, the following recipients who were once eligible to get donations are no longer on the list:

  • Registered non-governmental agencies which are not profit oriented or politically affiliated

  • Private hospitals

  • Universities and educational institutions

  • PPVs throughout the country which are managed by the COVID-19 Immunisation Task Force (CITF) or private sectors with the approval of CITF

Effective Date

These guidelines apply to donations made to community or charity projects to combat the spread of the COVID-19 outbreak during the period beginning in February 2020 and ending on December 31, 2022, or until the outbreak of COVID-19 is declared over by the World Health Organisation (WHO), whichever comes first

Tax deduction claims can be claimed from the assessment year 2020 and are applicable for the assessment year the contribution is made.

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