SIM

AI subscriptions and the 2027 tax relief

Budget 2027 proposes that subscriptions to AI software and apps for personal use, or for your spouse or child, can be claimed under the lifestyle tax relief from the year of assessment 2027.

Proposal only. Budget 2027 was tabled on 9 October 2026 and still has to be passed by Parliament. LHDN has not yet published detailed rules on which AI products qualify or what proof is needed. This page is general information, not tax advice. Disclaimer ›

Updated 2026-10-16. Baca dalam Bahasa Melayu

What was proposed

“it is proposed that the scope of the individual income tax relief for lifestyle be expanded to cover subscription expenditures for AI software and applications for personal use, spouse or child.” … “The limit for the individual lifestyle tax relief remains at RM2,500 including the proposed expanded scope.”

MOF, Budget 2027 tax measures, Appendix 6. Effective from the year of assessment 2027. PDF

In plain language

  • It would cover AI subscriptions you pay for in 2027 (year of assessment 2027), claimed when you file for that year.
  • It is for personal use by you, your spouse or your child, not for business use.
  • It is not extra money. The lifestyle relief cap stays at RM2,500 a year, shared with the other lifestyle items such as books, a personal computer, smartphone or tablet, and internet subscription in your own name.
  • Free plans cost nothing, so there is nothing to claim. It only matters if you pay for a plan.

What you can do now

  • Keep every invoice or receipt for AI subscriptions, ideally in your own name, showing the product, the period and the amount paid.
  • Keep personal and business subscriptions separate.
  • Don't sign up just for the relief. Wait for LHDN's rules before relying on it, and check with LHDN or a tax adviser.

Parents: children's tuition

Budget 2027 also proposes a new “Education and Skills Training Fees” relief (still RM7,000). It includes up to RM2,000 for courses, training, classes or tuition in STEM, arts, languages and religion for children (Appendix 5, proposal).

Businesses

For companies, Budget 2027 proposes extending the Accelerated Capital Allowance on ICT equipment and computer software to spending from 1 January 2027 to 31 December 2030 (Appendix 28). Ask your tax agent how it applies to AI software.

About the badge on SIM

We show “May qualify for 2027 tax relief” on 39 AI tools that sell paid plans to individuals. It is our reading of the proposal, not a confirmation from LHDN, and we will update it when the rules are published.

Free AI for ages 18–30: AI Untuk Rakyat

Malaysians aged 18 to 30 who complete and pass 6 set course modules on Rakyat Digital get a free 3-month subscription to selected AI apps. There are 100,000 places, released in phases from 31 August 2026. A MyDigital ID is needed. At launch the apps included ILMUchat and Gemini Enterprise (The Star). Budget 2027 proposes another 100,000 free subscriptions and adding ChatGPT (budget speech). Rakyat Digital ›

Sources