Paying for ChatGPT, Gemini or other AI subscriptions? Malaysia has announced that AI subscription fees will be included under individual income tax relief as part of Budget 2027.
The announcement was made by Prime Minister and Finance Minister Anwar Ibrahim during the tabling of Budget 2027 in Parliament this afternoon.
Besides AI subscriptions, the government has also announced an increase in individual income tax relief from RM9,000 to RM12,000, along with lower income tax rates for selected income brackets.
AI subscription fees included under lifestyle tax relief
Under Budget 2027, the government is expanding the scope of lifestyle tax relief to include subscriptions for artificial intelligence (AI) services.
This means taxpayers who pay for AI services such as ChatGPT and other subscription-based AI tools may be able to claim these expenses under the lifestyle tax relief category.
At present, the existing lifestyle tax relief of up to RM2,500 covers eligible expenses such as the purchase of books, computers, smartphones and tablets, as well as monthly internet subscriptions.
However, the government has yet to provide further details on the types of AI subscriptions that qualify, whether there will be specific limits for AI-related expenses.
The government also announced expansion of tax relief for education and skills training.
According to the announcement, the scope will be expanded to cover all fields of study, as well as children’s tuition fees. This is part of the government’s efforts to provide greater tax relief for individuals and families.
In addition, the government has also expanded the lifestyle tax relief to cover pet vaccination expenses and adoption costs from registered centres.
Individual income tax relief increased to RM12,000
Besides expanding the scope of lifestyle tax relief, the government is also increasing the individual income tax relief amount from RM9,000 to RM12,000.
This represents an increase of RM3,000 in the basic personal tax relief available to individual taxpayers.
Meanwhile, the government also announced a one percentage point reduction in individual income tax rates for two chargeable income brackets.
The tax rate for chargeable income between RM70,000 and RM100,000 will be reduced from 19% to 18%, while the rate for chargeable income between RM100,000 and RM150,000 will be reduced from 25% to 24%.
