To keep up with global trends and encourage investments in green technology, the Government under Malaysian Investment Development Authority (MIDA) and Malaysian Green Technology Corporation (GreenTech Malaysia) are jointly rolling out an investment tax allowance and income tax exemption for purchase of green assets and service providers.
The incentives will be valid till the end of 2020, and is aimed to catalyse investments in and the adoption of green technology by businesses and service providers as well as promoting the purchase of certified green technology products. The sectors that will benefit and should apply the incentive are renewable energy, energy efficiency, green buildings, data centres, waste management, and electric mobility.
Chief Executive Officer of MIDA, Dato’ Azman Mahmud added “Incentivisation plays a pivotal role in unlocking the full potential of the green technology industry. The introduction of these incentives, which cover a wide spectrum of areas namely energy, transportation, building, waste management and green support services, will pave the way for greater expansion in the sector. This will also positively contribute towards achieving sustainable growth in Malaysia,”
Incentive Model
The 100% investment tax allowance is specifically for qualifying capital expenditure incurred on green technology projects or the purchase of green technology assets that are listed under the MyHIJAU Directory. This Directory offers a one-stop centre for internationally and locally certified green products and services that enables consumers to easily identify and compare green products/services to make informed decisions.
To be eligible, companies must minimise the degradation of the environment or reduce greenhouse emissions; promote health and improvement of the environment; and conserve the use of energy and/or other forms of natural resources, or promote the use of renewable energy, or is able to recycle waste material resources.
As for the 100% tax incentive, businesses would need to have at least one competent or qualified personnel in green technology, incorporated a green policy related to the environment or sustainability in the operations and have 100% of its income derived from green technology services.
Further information on the ITA and ITE can be found at www.mida.gov.my. The list of certified green products is available at www.myhijau.my.
