1. Incentives for Forest Plantation Project
(i) Pioneer Status
Pioneer Status with a tax exemption of 100% of the statutory income for 10 years. Accumulated losses and unabsorbed capital allowances incurred during the pioneer period by companies whose pioneer status will expire on and after 1 October 2005 are allowed to be carried forward and deducted against post-pioneer income of a business relating to the same promoted activity or promoted product; or
(ii) Investment Tax Allowance (ITA)
Investment Tax Allowance (ITA) of 100% on the qualifying capital expenditure incurred within five years, which can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until the whole amount has been fully utilised.
Applications should be submitted to MIDA.
2. Incentives for the Storage, Treatment and Disposal of Toxic and Hazardous Wastes
(i) Pioneer Status
Pioneer Status with a tax exemption of 70% of the statutory income for five years. Accumulated losses and unabsorbed capital allowances incurred during the pioneer period by companies whose pioneer status will expire on and after 1 October 2005 are allowed to be carried forward and deducted against post-pioneer income of a business relating to the same promoted activity or promoted product; or
(ii) Investment Tax Allowance (ITA)
ITA of 60% on the qualifying capital expenditure incurred within five years, which can be offset against 70% of the statutory income in the year of assessment. Any unutilised allowances can be carried forward to subsequent years until the whole amount has been fully utilised.
Activities located in the States of Perlis, Sabah and Sarawak and the “Eastern Corridor” of Peninsular Malaysia are eligible for higher exemptions/allowances under Pioneer Status or Investment Tax Allowance in accordance with that given for promoted areas.
Applications should be submitted to MIDA.
3. Incentives for Energy Conservation
(i) Pioneer Status
Pioneer Status with a tax exemption of 70% of the statutory income for five years. Accumulated losses and unabsorbed capital allowances incurred during the pioneer period by companies whose pioneer status will expire on and after 1 October 2005 are allowed to be carried forward and deducted against post-pioneer income of a business relating to the same promoted activity or promoted product; or
(ii) Investment Tax Allowance (ITA)
ITA of 60% on the qualifying capital expenditure incurred within five years, which can be offset against 70% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until the whole amount has been fully utilised.
Activities located in the promoted areas i.e. the States of Perlis, Sabah, Sarawak and the “Eastern Corridor” of Peninsular Malaysia, are eligible for the Pioneer Status and ITA incentives in accordance with that given to promoted areas.
The companies must implement their projects within one year of approval.The incentives apply to applications received by 31 December 2010 .
Companies which undertake conservation of energy for own consumption are also eligible for ITA of 60% on the qualifying capital expenditure incurred within 5 years with the allowance to be offset against 70% of the statutory income for each year of assessment. Any unutilised allowance can be carried forward until the whole amount has been fully utilised.Activities located in the promoted areas i.e. the States of Perlis,Sabah, Sarawak and the designated”Eastern Corridor” of Peninsular Malaysia, are eligible for the ITA incentives in accordance with that given to promoted areas.
This incentive applies to applications received from 1 October 2005 until 31 December 2010.
Applications should be submitted to MIDA.
4. Incentives for Waste Recycling Activities
Applications should be submitted to MIDA.
5. Incentives for the Use of Renewable Energy Resources
(i) Pioneer Status
Pioneer Status with a tax exemption of 100% on statutory income for 10 years.Accumulated losses and unabsorbed capital allowances incurred during the pioneer period by companies whose pioneer status will expire on and after 1 October 2005 are allowed to be carried forward and deducted against post-pioneer income of a business relating to the same promoted activity or promoted product; or
(ii) Investment Tax Allowance (ITA)
ITA of 100% on the qualifying capital expenditure incurred within a period of 5 years. This allowance can be offset against 100% of the statutory income for each year of assessment. Any unutilised allowances can be carried forward to subsequent years until the whole amount has been fully utilized.
These incentives are for applications received from 1 October 2005 until 31December 2010. Companies which have been granted approval for these incentives but have not implemented the projects are also eligible for these incentives. Companies must implement their projects within one year from the date of approval.
For the purpose of this incentive, ‘biomass sources’ refer to palm oil mill/estate waste, rice mill waste, sugar cane mill waste,timber/sawmill waste, paper recycling mill waste, municipal waste and biogas (from landfill, palm oil mill effluent (POME), animal waste and others), while energy forms refer to electricity, steam, chilled water,and heat.
Applications should be submitted to MIDA.
6. Additional Incentives for Environmental Management
This incentive provides for a special allowance at an initial rate of 40%and an annual rate of 20% (to be written off within a period of 3years) for capital expenditure on related machinery and equipment incurred by:
- Companies that are waste generators and wish to establish facilities to store,treat and dispose of their wastes, either on-site or off-site; and
- Companies undertaking waste recycling activities.
Applications should be submitted to IRB.
In the case of companies that incur capital expenditure for conserving their own energy consumption, the write-off period is accelerated to one year effective from the year of assessment 2003. Applications should be submitted to the IRB with a letter from the Ministry of Energy, Water and Communications Malaysia certifying that the related equipment is used exclusively for the purpose of energy conservation.
(ii) Accelerated Capital Allowance for Equipment Used for the Generation of Renewable Energy for Own Consumption
To further promote the use of renewable energy, equipment used by companies to generate energy from renewable resources for its own consumption will be granted Accelerated Capital Allowance to be fully claimed in one year period effective from the year of assessment of2005.
The equipment eligible for Accelerated Capital Allowance shall be determined by the Ministry of Finance.
Applications should be submitted to IRB.
