Tuesday, April 28, 2009

Don't forget to deduct your balls

Sorry for the crude headline, but I couldn’t resist ;-) If you haven’t filed your taxes yet, don’t forget the new tax deductions for sports equipment, following the amendments for 2008. By “sports equipment” I am assuming that LHDN (Inland Revenue Board) means items like tennis racquets and tennis balls. In fact, the LHDN website specifically mentions golf balls and shuttlecocks.

From the LHDN website:
“An amount limited to a maximum of RM300 is deductible in respect of expenses expended by the individual for the purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997. Sports equipment includes equipment with short lifespan e.g. golf balls and shuttlecocks but excluding sports attire, e.g. swimsuits and sports shoes.”

Among the sports covered in the Sports Development Act are tennis, football, basketball, badminton, golf, and squash. In all, 39 sports are covered (see below).

Unfortunately, the new exemptions exclude sports attire; the LHDN notes (see below) specifically exclude swimsuits and sports shoes! So you can’t deduct those Hush Puppies or Manolo Blahniks (nice try). That also means you can’t deduct that Speedo Fastskin LZR Racer swimsuit that you bought (as used by Mark Phelps, et al. Costs around RM2,200).

I was also quite amused by the inclusion of shooting and archery in the Sports Development Act. If I’m reading the LHDN exemptions right, that means you can deduct the cost of bullets and arrows!

Remember that you will need to have receipts for items you want to deduct, plus you’ll need to keep them for seven years. If all you have are the credit card receipts, remember to photocopy them, because they have an annoying tendency to fade over time.

Here are some useful links:

LHDN: Explanatory Notes for BE form 2008 (Income Tax of an Individual, PDF file. It’s in English!)
Go to this section:
D8C - Purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997. Also check out the other sections for stuff you can deduct.

Sports Development Act 1997 (PDF file)
p. 23 has a list of activities regarded as sports for the purposes of the Act.

Your tax queries answered (The Star)
Star’s column basically rehashes the Explanatory Notes for sports equipment. But you may get some useful info about other deductibles.

Image ganked from AlterMedia România.

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