Green Technology Tax Incentives in Malaysia 2025

Ng Yew Weng

4 days ago7 min read

by Ng Yew Weng

Table of Contents:

• Introduction to Malaysia's Green Technology Tax Incentive

• What is the Green Investment Tax Allowance (GITA)?

• What is the Green Income Tax Exemption (GITE)?

• How can companies qualify for GITA or GITE?

• How can companies apply for Green Technology Tax Incentives?

• Double your tax incentives with Progressture Solar

Introduction to Malaysia's Green Technology Tax Incentive

Malaysia has introduced a range of incentives to encourage the growth of Malaysia's green economy, and one of them is the Green Technology Tax Incentive. This programme encompasses the Green Investment Tax Allowance (GITA) and the Green Income Tax Exemption (GITE). If you want to skip ahead and see whether you qualify for GITA or GITE, click here. Otherwise, keep reading to learn more.

At Progressture Solar, we have successfully managed over 800 completed and ongoing clean energy projects, resulting in the generation of 131,400,000 kWh of clean energy and the prevention of 99,600 tonnes of carbon emissions annually. Based on our extensive experience within the energy sector, here is all you need to know about the Green Technology Tax Incentive in Malaysia.

LEARN MORE

What Is the Green Investment Tax Allowance (GITA)?

The Green Investment Tax Allowance (GITA) aims to give companies incentives to invest in green technology. It encompasses two areas:

Green Assets (for own consumption)

Under the Green Investment Tax Allowance (GITA) on Green Assets, companies investing in green assets, such as solar panels and other renewable energy assets, are eligible for a tax allowance. The allowance may be equivalent to 60% of the qualifying capital expenditure incurred within a five-year period. This incentive not only encourages companies to invest in renewable energy infrastructure but also helps to offset the initial costs associated with such investments.

In addition to the GITA, the government offers capital allowance benefits for businesses investing in renewable energy. Companies that purchase solar systems outright can claim capital allowances based on a percentage of the system's initial cost. This allows businesses to deduct a significant portion of their investment from their taxable income, providing substantial tax relief and enhancing the financial viability of renewable energy projects. Along with these double tax benefits, companies enjoy significant reductions in their electricity bills and enhance their sustainability efforts by adopting clean energy.

Green Projects (for business purposes)

What Is the Green Income Tax Exemption (GITE)?

The Green Income Tax Exemption (GITE) applies to service providers who are supporting the development and maintenance of renewable energy infrastructure. Under this initiative, companies providing services related to renewable energy, such as installation, maintenance, and consultancy, are eligible for a tax allowance. This initiative aims to foster a robust ecosystem of service providers, thereby facilitating the smooth operation and maintenance of renewable energy projects across the country.

GITE provides several benefits to service providers in the renewable energy sector:

Reduces the financial burden associated with the initial investment in equipment, training, and other necessary resources to provide high-quality services
The tax allowance allows companies to recoup a significant portion of their capital expenditure, making their services more affordable and competitive

How Can Companies Qualify for GITA or GITE?

The application period for GITA and GITE has been extended until 31st December 2026 [MIDA]. The table below summarises the tax incentives and what conditions companies need to fulfil to qualify for GITA or GITE.

	GITA on Green Assets	GITA on Green Projects	GITE on Green Services
Description	Applicable for companies that acquire qualifying green technology assets (such as solar PV systems)	Applicable for companies undertaking qualifying green technology projects, either for business or own consumption	Applicable for qualifying green technology service provider companies that are listed under the MyHIJAU directory
Conditions	Green technology asset owned by a company (company must be approved by MOF, verified by MGTC, and listed under MyHIJAU directory)	Equipment/asset must be owned by a company (company recognised under MyHIJAU or product certification accepted by MGTC)	Must undertake at least 3 qualifying activities listed under MIDA Guidelines, with proper green policy and documented SOPs
	Used in the business, carried out by a company in Malaysia and for own consumption	Projects with Feed-in Tariff for solar energy are not eligible for the incentive	At least 5 full time employees in Malaysia (2 competent personnel with green technology specialisation)
	Same asset must not qualify for multiple incentives (if GITA or other claims are made)	Same asset must not qualify for multiple incentives (if GITA or other claims are made)	100% income derived from green technology services

How Can Companies Apply for Green Technology Tax Incentives?

Applying for green technology tax incentives in Malaysia is a straightforward process. Interested parties must first ensure that their projects or investments meet the eligibility criteria outlined by the Malaysian Investment Development Authority (MIDA) and the Malaysian Green Technology and Climate Change (MGTC). They include these steps:

Determine Eligibility

Before starting the application process, it is crucial to determine whether your project or investment meets the eligibility criteria for green technology tax incentives. Review the guidelines provided by MIDA and the Malaysian Green Technology and Climate Change (MGTC) to ensure that your project aligns with their requirements. Typically, these criteria include the use of approved green technology, compliance with environmental regulations, and adherence to relevant industry guidelines.

Prepare Documentation

Fill Out Application Forms

Include Supporting Documents

Submit Application

Review and Evaluation

Approval and Notification

Compliance and Reporting

Double Your Tax Incentives with Progressture Solar

Progressture Solar is a leading Clean Energy provider and investor in Malaysia. By purchasing our solar system outright, you will be eligible for maximum tax incentives provided by the government. Our team ensures a seamless MIDA application process so you can enjoy the following tax benefits:

Green Investment Tax Allowance (60% QCE, 70% offset against income)

When you invest in Progressture Solar's solar PV system, you can take advantage of the Green Investment Tax Allowance (GITA) offered by the Malaysian government. This incentive allows you to receive a tax allowance equivalent to 60% of your qualifying capital expenditure (QCE) incurred on green assets, such as solar panels. Additionally, you can offset up to 70% of this allowance against your taxable income. By leveraging the GITA, you not only reduce your upfront investment costs but also enjoy substantial tax savings.

Capital Allowance (34% initial, 14% annual)

Make the smart choice today and partner with Progressture Solar to enjoy double tax incentives, save on electricity costs, and contribute to a greener future. Contact us now for more information on how you can benefit from our solar systems and the tax incentives available.