s 39 Deductions not allowed
(1) Subject to any express provision of this Act, in ascertaining the adjusted income of any person from any source for the basis period for a year of assessment no deduction from the gross income from that source for that period shall be allowed in respect of— (a) domestic or private expenses; (b) any disbursements or expenses not being money wholly and exclusively laid out or expended for the purpose of producing the gross income; (c) any capital withdrawn or any sum employed or intended to be employed as capital; (d) any amount in respect of any payment to any pension, provident, savings, widows and orphans or other similar fund or society which is not an approved scheme; (e) any expenditure incurred in relation to a business, being expenditure which is— (i) qualifying mining expenditure for the purposes of Schedule 2; (ii) qualifying expenditure, qualifying agriculture expenditure or qualifying forest expenditure for the purposes of Schedule 3; or (iii) qualifying prospecting expenditure for the purposes of Schedule 4, and which but for this paragraph would be deductible in ascertaining the adjusted income from the business; (f) interest or royalty derived from Malaysia from which tax is deductible under section 109, if tax has not been deducted therefrom and paid to the Director General in accordance with subsection (1) of that section: Provided that this paragraph shall not apply if the payer has paid the amount referred to in subsection (2) of that section; (g) any sum, by whatever name called, payable (otherwise than to a State Government or with the approval of the Minister, a statutory authority, or other body the capital or fund of which is wholly or substantially owned by a State Government or a statutory authority) for the use of a licence or permit to extract timber from a forest in Malaysia; (h) (Deleted by Act 619); (i) any contract payment from which tax is deductible under section 107A , if tax has not been deducted therefrom and paid to the Director General in accordance with subsection (1) of that section: Provided that this paragraph shall not apply if the payer has paid the amount referred to in subsection (2) of that section; (j) any payments from which tax is deductible under section 109B , if tax has not been deducted therefrom and paid to the Director General in accordance with subsection (1) of that section: Provided that this paragraph shall not apply if the payer has paid the amount referred to in subsection (2) of that section; (k) any sum paid by way of rentals in respect of a motor vehicle, other than a motor vehicle licensed by the appropriate authority for commercial transportation of goods or passengers, in excess of fifty thousand ringgit: Provided that if the motor vehicle has not been used by any person for any purpose prior to the rental and the total cost of the motor vehicle does not exceed one hundred and fifty thousand ringgit, any sum paid by way of rental in excess of one hundred thousand ringgit: Provided further that the maximum amount of deduction in respect of the rentals of such motor vehicle in the year of assessment and subsequent years of assessment shall not in the aggregate exceed fifty thousand ringgit or one hundred thousand ringgit, as the case may be, in respect of that motor vehicle; (l) a sum equal to fifty percent of any expenses incurred in the provision of entertainment including any sums paid to an employee of that person for the purpose of defraying expenses incurred by that employee in the provision of entertainment: Provided that this paragraph shall not apply to the following expenses: (i) the provision of entertainment to his employees except where such provision is incidental to the provision of entertainment for others; (ii) the provision of entertainment by a person who carries on a business which consists of or includes the provision for payment of entertainment to clients or customers of that business and that entertainment is provided for payment by the clients or customers in the ordinary course of that business; (iii) the provision of promotional gifts at trade fairs or trade or industrial exhibitions held outside Malaysia for the promotion of exports from Malaysia; (iv) the provision of promotional samples of products of the business of that person; (v) the provision of entertainment for cultural or sporting events open to members of the public, wholly to promote the business of that person; (vi) the provision of promotional gifts within Malaysia consisting of articles incorporating a conspicuous advertisement or logo of the business; or (vii) the provision of entertainment which is related wholly to sales arising from the business of that person; or (m) notwithstanding subparagraph (l)(i), any expenditure incurred in the provision of a benefit or amenity to an employee consisting of a leave passage within or outside Malaysia. (2) It is hereby declared that section 33, except in so far as it relates to expenses of the kind specified in paragraphs (1)(a) to (d) thereof, is not an express provision of this Act within the meaning of this section.