4.1 Incentives for Forest Plantation Projects

Companies that undertake forest plantation projects are eligible for the following incentives under the Promotion of Investments Acts, 1986:

  1. Pioneer Status with income tax exemption of 100% of the statutory income for ten years. Unabsorbed capital allowances incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or
  2. Investment Tax Allowance (ITA) of 100% on the qualifying capital expenditure incurred within five years. The 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 fully utilised.

4.2 Incentives for Waste Recycling Activities

 

Companies undertaking waste recycling activities that are high value-added and use high technology are eligible for Pioneer Status or ITA. These activities which include the recycling of agricultural wastes or agricultural by-products, recycling of chemicals and the production of reconstituted wood-based panel boards or products are eligible for:

  1. Pioneer Status, with income tax exemption of 70% of the statutory income for a period of five years. Unabsorbed capital allowances incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company.

 

Accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company for a period of seven consecutive years

;or

  1. Investment Tax Allowance of 60% on the qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 70% of the statutory income in each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.

 

Companies are only allowed to recycle wastes/ scraps obtained within Malaysia including Free Industrial Zones/Licensed Manufacturing Warehouse (FIZs/LMWs). Companies are not allowed to import scraps/wastes from overseas.

 

 

4.3 Green Technology Incentive

In Budget 2014, the Government had announced the provision of investment tax allowance for the purchase of green technology assets and income tax exemption on the use of green technology services and system to further strengthen the development of green technology (GT).

Green Technology Project

Companies undertaking activities in the Green Technology projects are eligible for:

  1. Income tax exemption equivalent to Investment Tax Allowance of 100% on the qualifying capital expenditure incurred on a green technology project for a maximum period of five years or until 31 December 2020 from the date of first qualifying capital expenditure incurred. This allowance 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 fully utilised.

Green Services

Companies undertaking activities in the Green Services projects are eligible for:

  1. Income tax exemption of 100% of the statutory income for a period of five years or until year of assessment of 2020. Unabsorbed income losses after the end of exemption period are allowed to be carried forward for seven consecutive year of assessments.

4.4 Incentives For Waste Eco Park (WEP)

Waste Eco Park is defined as a place for waste recycling, recovery and treatment activities to be carried out and approved by relevant authorities. The park has to incorporate basic infrastructure such as road, drainage, utilities and sewerage, building and facility for waste receipt and separation, waste water treatment facility, waste recycling/recovery/treatment facilities and building for education/awareness center. Malaysian incorporated companies involved as developer, operator, or manager are eligible for tax incentive as below:

  1. WEP Develop
  2. Income tax exemption of 70% of the statutory income from year of assessment 2016 until year of assessment 2025. Unabsorbed income losses after the end of exemption period are allowed to be carried forward for seven consecutive years of assessments.

 

  1. WEP Manager

Companies managing, maintaining, supervising and marketing the WEP to ensure effective and efficient coordination/ implementation are eligible for:

 

  1. Income tax exemption of 70% of the statutory income from year of assessment 2016 until year of assessment 2025. Unabsorbed income losses after the end of exemption period are allowed to be carried forward for seven consecutive years of assessments

 

  • WEP Operator
  1. Income tax exemption of 100% of the statutory income for a period of 5 years. Unabsorbed income losses after the end of exemption period are allowed to be carried forward for seven consecutive years of assessments.
  2. Income tax exemption equivalent to Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within five years from the date the first qualifying capital expenditure is incurred. This allowance can be offset against 70% of the statutory income for each year of assessment.

4.5 Accelerated Capital Allowance

  1. Waste Recycling Activities

Effective from the Year of Assessment 2001, a manufacturing company which has incurred Qualifying Expenditure for the purpose of its business may claim ACA on the plant and machinery which are:-

  • Used exclusively or otherwise for the recycling of wastes, or
  • Used for further processing of the wastes into finished products

 

  1. Equipment to Maintain Quality of Power Supply

In order to reduce the costs of doing business effective from the Year of Assessment 2005, companies which incur capital expenditure on equipment to ensure the quality of power supply, are eligible for an ACA – for a period of two years which allows the companies to write off the capital expenditure within two years, i.e. an initial allowance of 20% and an annual allowance of 40%.

Only equipment determined by the Ministry of Energy, Science, Technology, Environment & Climate Change is eligible for the ACA. Applications should be submitted to the IRB