Effective from 1st January 2024 to 31st December 2026, the GITA (Green Investment Tax Allowance) Project for Own Consumption will be merged with the GITA Asset and will fall under the purview of the Malaysian Green Technology and Climate Change Corporation (MGTC). Hence, all new applications for GITA Asset for own consumption to be submitted to MGTC within the stipulated timeframe.
As per the Malaysian government website, the application period for the Green Investment Tax Allowance (GITA) Project for business purposes and Green Income Tax Exemption (GITE) for Solar Leasing incentives has been extended until 31st December 2026. Dwelling on the details, the site further says that Green Income Tax Exemption (GITE) is available for solar leasing activity for a period of up to ten (10) years of assessment. The incentive period shall commence from the date of first invoice issued and this date shall not be earlier than the date of application received by MIDA(Malaysian Investment Development Authority) . The application for Green Income Tax Exemption (GITE – Solar Leasing) can be submitted to MIDA from 1 January 2024 until 31 December 2026. These applications can be submitted to MIDA via the InvestMalaysia portal at https://investmalaysia.mida.gov.my.
It may be noted that the Green Investment Tax Allowance (GITA) is a tax incentive program introduced by the Malaysian government in 2014 to promote the growth of Malaysia’s green economy. The program provides two incentives to companies seeking to acquire qualifying green technology assets listed under the MyHIJAU Directory or those undertaking qualifying green technology projects for business or own consumption . These incentives are:
1. Green Investment Tax Allowance (GITA) : Applicable for companies that undertake qualifying green technology projects for business or own consumption.
2. Green Income Tax Exemption (GITE): Available for qualifying green technology service provider companies listed under the MyHIJAU Directory.
Here are the few other key highlight of the Malaysia’s budget 2024 that indicates the government’s goal of promoting green technology and sustainability —
1. Tax deduction on environmental, social, and governance (ESG) related expenditures — Deductions of up to RM50,000 per YA for ESG related expenditures such as the preparation of reports related to corporate tax governance frameworks, preparation of transfer pricing documentation, consultation fees for implementing e-invoicing incurred by micro and small enterprises, etc. applicable from YA2024 to 2027.
2.Tax incentives for rental of electrical vehicles (EVs)–
Tax deductions on the rental of non-commercial EVs (up to RM300,000) extended to YA2027.
3.Sustainable and responsible investment (SRI) incentives—Tax exemptions on management fee income for companies managing SRI funds extended to 2027.
Tax deductions on the issuance cost of an SRI sukuk (Islamic financial certificate) approved, authorised, or lodged with the Securities Commission Malaysia (SC) extended to YA2027.
3. Tax exemptions on the SRI sukuk grant and bond grant schemes— It is expanded to include SRI-linked sukuk grants and bonds issued under the ASEAN Sustainability-Linked Bond Standards (ASEAN SLBS) approved by the SC. Applicable for applications received by the SC from 1 January 2024 to 31 December 2025.
4. Tax deductions on contributions for environmental preservation and conservation projects.
5. A further tax deduction of up to RM300,000 will be available for costs incurred by companies for measurement, reporting, and verification (MRV) in relation to the development of carbon projects. The deduction is deductible against income earned from carbon credits traded on Bursa Carbon Exchange (BCX), for applications received by the Malaysia Green Technology and Climate Change Corporation (MGTC) from 1 January 2024 until 31 December 2026.