FINANCIAL INCENTIVES FOR GREEN TECHNOLOGY AS ANNOUNCED UNDER BUDGET 2020

Extension of Green Investment Tax Allowance (GITA) & Green Income Tax Exemption (GITE) until 2023

Green Investment Tax Allowance – GITA (Project) :

  • ITA of 100% of qualifying capital expenditure incurred on a green technology project from the date on which the first qualifying capital expenditure incurred (application received before 1st January 2020) until 31 December 2020 or up to 3 years; or
  • ITA of 100% of qualifying capital expenditure incurred on a green technology project from the date on which the first qualifying capital expenditure incurred (application received start 1 January 2020) until 3 years.
  • The allowance can be offset against 70% of statutory income in the year of assessment.
  • Qualifying activities comprises of Renewable Energy, Energy Efficiency, Green Building, Green Data Centre and Integrated Waste Management Activity.

Green Income Tax Exemption – GITE (Services) :

  • ITE of 100% of statutory income from the year of assessment where the date of application received by MIDA before 1st January 2020 until the year of assessment 2020 or up to 3 years of assessment.
  • ITE of 70% of statutory income from the year of assessment where the date of application received by MIDA start 1 January 2020 until 3 year of assessment.
  • Qualifying activities under GITE encompasses Renewable Energy, Energy Efficiency, Green Building, Green Data Centre, Green Township, Certification/Verification and Electric Vehicles (EV).
  • Details as table below:
DetailsApplication before January 2020Application starts 1 January 2020
Exemption rate100% of Statutory Income70% of Statutory Income
Exemption period31 December 2020 or up to 3 years of assessment3 years of assessment
Incentive period Application for extension must be before 31 December 20201 January 2020 – 31 December 2023
ConditionsAs current guidelines until 31 Dec 2019New condition and criteria starts 1 January 2020

For any latest Procedures, Guidelines and Forms kindly download from MIDA website. Please click here for further information.

Green Income Tax Exemption – GITE (Leasing) :

  • ITE of 70% of statutory income from the year of assessment where the date of application received by MIDA start 1 January 2020 up to 10 years of assessment and companies are undertaking solar leasing activities.

** GITE Incentive Guideline for solar leasing as announced under Budget 2020 is still under development.

Green Technology Financing Scheme 2.0 (GTFS 2.0)

GTFS is a financing scheme offered to investors which is supported by the government offering a 2% p.a. interest/profit rate subsidy for the first seven years and 60% government guarantee of green component cost to financial institutions.

For more information please visit : https://www.gtfs.my/