MIDA - Tax Incentives For Green Technology Industry
MIDA - Tax Incentives For Green Technology Industry
MIDA - Tax Incentives For Green Technology Industry
2
MIDA IN BRIEF
3
Who Are We?
Promotion
Follow Up/
Monitoring
First point of contact for
investors who intend to set up
projects in the manufacturing
and services sectors in
Malaysia 4
23 Overseas Centres • Los Angeles • Tokyo
• Houston • Osaka
around the world
• New York • Beijing
• Boston • Guangzhou
• San Jose • Shanghai
• Chicago
• Seoul
• London • Mumbai
• Stockholm • Singapore
• Munich • Taiwan
• Frankfurt • Sydney
• Milan
• Paris
• Dubai
12 State offices
Alor Setar
Kota Bharu
HQ
v KL Sentral,
Penang Kuala
Kota Kinabalu
Kuala Lumpur
Ipoh Terengganu
Selangor
Kuantan
Seremban
Melaka
v
Johor Bahru
Kuching
Based in MIDA
6
APPROVED
INVESTMENTS
7
EE Projects Approved as at 31 December 2016
Total Investment
Type of Services No. of Projects
(RM mill)
Own Consumption 106 5,962.04
ESCO 23 492.52
Total 129 6,454.56
Total Investment
Industry No. of Projects
(RM million)
Basic Metal Products 45 1,909.7
Rubber Products 47 1,814.2
Chemical & Chemical
43 1,216.4
Products
Plastic Products 73 844.5
Petroleum Products 22 339.4
Fabricated Metal
7 269.3
Products
Electronics & Electrical
22 202.5
Products
* Approved Incentives since year 1980- 31 Dec 2016
Source: MIDA
9
Waste Recycling Projects Approved as at 31 December 2016
Total Investment
Industry No. of Projects
(RM million)
Non-Metallic Mineral 5 163.4
Products
Food Manufacturing 4 109.9
Textiles & Textile 7 75.7
Products
Paper, Printing & 4 31.6
Publishing
Solid / Medical Waste / 3 392.0
Waste to Energy
Miscellaneous 3 58.3
11
12
Investment Tax
Allowance (ITA) Green
Technology
Incentive,
Income Tax
Income Tax Act, 1967
Exemption (ITE)
13
INVESTMENT
TAX ALLOWANCE
(ITA)
14
Eligible companies
• Companies that undertake investments in promoted projects
that encourage sustainability and green environment
• Either for own use or business purposes
Incentive
• Investment Tax Allowance (ITA) of 100% of qualifying capital
expenditure (QCE) incurred from YA 2013 (not earlier than 25
Oct 2013) until YA 2020.
• The ITA can be utilised to offset against 70% of statutory
income
Industry Project
Renewable Energy Generation of energy such as electricity, steam, heat and chilled
(RE) water using RE sources like solar*, biomass, biogas, mini-hydro
and geothermal
*Excluding solar FiT project
Green Data Centre Purchase of any energy efficient product or solution for data
centre which have been awarded green building certificates
from relevant certification body approved by the Government
Integrated Waste Waste recycling / recovery / treatment activities and additional
Management activities such as composting / storage / collection / disposal
Activity
16
• Company must be incorporated under the Companies
Act, 1965
17
Example 1: Assumption: ITA: RM4.6 million
WITHOUT TAX INCENTIVE WITH TAX INCENTIVE
(RM) (RM)
Profit before tax 10,000,000 10,000,000
add/less tax adjustments 2,000,000 2,000,000
Adjusted income 12,000,000 12,000,000
Less: Capital allowances (5,000,000) (5,000,000)
Statutory income 7,000,000 7,000,000
Percentage (%) 70% 30%
4,900,000 2,100,000
(-) ITA Nil 4,600,000 -
300,000 2,100,000
Chargeable income 7,000,000 2,400,000
Tax liability @ 24% 1,680,000 576,000
18
Example 2: Assumption: ITA: RM10 million
WITHOUT TAX INCENTIVE WITH TAX INCENTIVE
(RM) (RM)
Profit before tax 10,000,000 10,000,000
add/less tax adjustments 2,000,000 2,000,000
Adjusted income 12,000,000 12,000,000
Less: Capital allowances (5,000,000) (5,000,000)
Statutory income 7,000,000 7,000,000
Percentage (%) 70% 30%
4,900,000 2,100,000
(-) ITA Nil *10,000,000 -
0 2,100,000
Chargeable income 7,000,000 2,100,000
Tax liability @ 24% 1,680,000 504,000
Balance to be carried forward to next year of assessment 5,100,000
19
* Only RM4.9 million will be utilised.
INCOME TAX
EXEMPTION
(ITE)
20
Eligible companies
• Companies which provide green services that support
investments in green project
Incentives
• Income tax exemption of 100% of statutory income
from the year of assessment 2013 until year of
assessment 2020.
Industry Services
Renewable Energy Feasibility study, system design & advisory & consultancy, testing
(RE) & commissioning
Energy Efficiency (EE) Advisory & consultancy, energy audit & management,
measurement & verification, testing & commissioning
Green Building Design & consultancy, testing & commissioning of green building
equipment/system
Green Data Centre System design & feasibility study, advisory & consultancy, testing
& commissioning
Certification or Green certification of products, equipment and buildings
Verification Bodies
Green Township Advisory & consultancy , design & feasibility study in green
township and low carbon cities planning
Electric Vehicles • Installation, maintenance and repair of EV charging
equipment, infrastructure and EV charging station.
• Operation of EV charging station.
• Maintenance, repair and overhaul of EV
22
• Company must be incorporated under the Companies Act,
1965 and has started operation in green services after 25
Oct 2013.
23
Example : ITE (Statutory income 100% exempted)
24
APPLICATION
PROCEDURES
25
Applicant checks on project eligibility to apply
ITA/ITE
Project Services
MGTC validates project MGTC verifies service
complies to GT project listed/registered under Project
criteria MyHIJAU Mark
Service MGTC requests
Comply Comply Not comply further information
and verification
28
MGTC’s role:
• To verify the technical requirement including the main equipment / assets
as major components for the performance and green impact from the
project
Documents required
• Application Form (GT/JA) which submitted to MIDA earlier
• Approval Letter from MIDA
Criteria
• 60% of main equipment/assets in the GITA Project must be recognised
and registered under the MyHIJAU Mark or have product certification
that is recognised and accepted by GreenTech Malaysia.
• Project’s impacts to the environment i.e. GHG emission reduction, waste
reduction, fuel savings, environmental improvement, energy consumption
savings and water consumption savings
30
• Company has to apply for license pepasangan persendirian under Electricity
Supply Act 1990 to generate electricity for own consumption.
31
THANK YOU
Zabidah Daud (Ms) Azhana Mohamed Saleh (Ms.)
Senior Deputy Director
Director
Clean Technology & Environment Management
Division MIDA Penang
MIDA Sentral Menara Boustead Penang
No. 5, Jalan Stesen Sentral 5 39, Jalan Sultan Ahmad Shah
KL Sentral, 50470 Kuala Lumpur 10050 Pulau Pinang
Tel: 03 – 2267 6719/3633 Tel: +604-2280575
Fax: 03 – 2274 8470 Fax: +604-2280327
Email: zabidah@mida.gov.my Email: azhana@mida.gov.my
investmalaysia@mida.gov.my penang@mida.gov.my
www.mida.gov.my 32
Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.
Alternative Proxies: