Malaysia offers a wide range of tax incentives ranging from tax exemptions, allowances to enhanced tax deductions. Generally tax incentives are available for tax resident companies.
Pioneer Status (PS) is an incentive in the form of tax exemption, which is granted to companies participating in promoted activities or producing promoted products, for a period of 5 or 10 years.
The alternative to the PS incentive is usually investment tax allowance (ITA). ITA is an incentive granted based on the capital expenditure incurred on industrial buildings, plant and machinery used for the purpose of promoted activities or the production of promoted products. This incentive is generally given for a period of 5 or 10 years.
PS and ITA are mutually exclusive. Where income is exempted under the PS incentive, tax exempt dividends may be paid out of the exempted income. Unutilised ITA can be carried forward until fully utilised. However unutilised PS losses can only be carried forward for a maximum period of 7 consecutive YAs after the end of the pioneer period. For unutilised PS losses accumulated as at YA 2018, where the incentive has already expired, these losses can be carried forward for another 7 YAs until YA 2025.
Malaysia has undertaken a review of its tax incentives and excluded royalties and intellectual property income from its tax incentives in line with the requirements of BEPS Action 5 (Counter Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance).
An Approved Incentive Scheme is proposed for high technology activity in the manufacturing and services sectors and other activities which benefit the Malaysian economy. Under the scheme, a concessionary tax rate of not more than 20% is to be prescribed by the Minister of Finance (MoF).
In the following pages, we provide a summary of the main tax incentives for the relevant industry sectors.
Incentives |
|
Years |
Aerospace companies in Malaysia undertaking specified high-value manufacturing / services (Applications received by 31.12.2025) |
||
New company | Income tax exemption of 70% to 100% ITA of 60% to 100% set-off against 70% to 100% of statutory income (SI) |
5 to 10 5 |
Existing company |
ITA of 60% set-off against 70% of SI
|
5 |
Incentives |
Years |
|
Main incentives |
||
Company producing promoted products or engaged in promoted activities |
PS with tax exemption of 70% of SI; or ITA of 60% on qualifying expenditure (QE) set-off against 70% of SI |
5 |
Allowance for increased exports (AIE) |
||
For prescribed agricultural produce |
Allowance equal to 10% of the value of increased exports deducted against 70% of SI |
|
Enhanced AIE |
||
Company attaining / receiving*: |
Rates of allowance, deductible up to 70% of SI: |
|
|
30% of the value of increased exports |
|
|
50% of the value of increased exports |
|
|
100% of the value of increased exports |
|
Reinvestment |
||
Company undertaking qualifying project in expansion, modernisation or diversification of its cultivation and farming business excluding the business of rearing chicken and ducks |
Reinvestment Allowance of 60% of QE set-off against 70% of SI |
15 |
Adoption of closed house system in the business of rearing chicken (QE incurred from YA 2023 to YA 2025) | Accelerated capital allowance of 100% of QE; and Income tax exemption of 100% on QE |
|
Company in resource-based industries | PS with tax exemption of 70% of SI; or ITA of 60% on QE set-off against 70% of SI |
5 |
Special reinvestment allowance (RA) |
||
A special RA granted for YA 2020 to YA 2024 for selected agriculture projects which have exhausted their existing RA period and special RA granted for YA 2016 to YA 2018 | ||
Food production project |
||
Company investing in a subsidiary company which undertakes new food production project* |
Tax deduction equivalent to the amount of investment made |
|
Company undertaking food production project * : - New project - Expansion project for existing company |
Income tax exemption of 100% of SI Income tax exemption of 100% of SI |
10 5 |
* including planting of seeds for agro-food and high seas fishing projects, and includes agricultural projects based on Controlled Environment Agriculture for applications by 31.12.2025.
Angel investor |
||
Resident individual who invests in investee company (Applications received by 31.12.2023, extended to 31.12.2026)
|
Tax exemption of aggregate income in the second YA following the investment for a sum equal to the amount invested in the investee company (subject to conditions) |
|
Equity crowdfunding |
||
Individual who invests (including through a Limited Liability Partnership nominee company) in equity crowdfunding from 1.1.2021 to 31.12.2023 (extended to 31.12.2026) | Tax exemption of aggregate income for a sum equal to 50% of the amount invested (subject to conditions).
|
|
Venture capital (VC) |
||
Venture capital company (VCC)
|
Tax exemption on SI from all sources of income, other than interest income from savings or fixed deposits and profits from Syariah-based deposits (first certification from the Securities Commission to be obtained by 31.12.2026) |
5 |
Venture capital management company
|
Tax exemption on share of profits, performance & management fees from investment made by VCC (until YA 2026) |
- |
Resident investing in VCC fund
|
Single deduction equivalent to the amount of investment made in a VCC not later than 31.12.2026, limited to RM20 million a year |
- |
Resident investing in VC
|
Single deduction equivalent to the amount of investment in a VC not later than 31.12.2026 |
- |
Incentives |
|
Years |
New manufacturing projects, and expansion and / or diversification projects for:
|
Income tax exemption; or Income tax exemption equivalent to ITA |
5/10 |
Investment in manufacturing of electric vehicle charging equipment (Applications received by 31.12.2025) |
Income tax exemption of 100% of SI from YA 2023 to YA 2032; or ITA of 100% on QE set-off against 100% of SI |
5 |
Rental of non-commercial electric vehicles |
Tax deduction on rentals incurred from YA 2023 to YA 2025, extended to YA 2027 (capped at RM300,000) |
Incentives |
Years |
|
BioNexus status company: (Applications received by 31.12.2024) |
||
|
Income tax exemption of 100% of SI; or ITA of 100% on QE set-off against 100% of SI |
10/5* 5 |
Industrial building allowance (IBA) of 10% |
10 |
|
|
Concessionary tax rate of 20% of SI | 10 |
Company or individual investor investing in BioNexus company |
Single deduction equivalent to the value of investment in seed capital and early stage financing |
- |
Incentives |
Years |
|
New companies (providing cold room facilities for prescribed perishable agriculture produce) |
PS with tax exemption of 70% of SI; or ITA of 60% on QE set-off against 70% of SI |
5 |
Existing companies (reinvesting in cold room facilities for prescribed perishable agriculture produce) |
PS with tax exemption of 70% of increased SI; or ITA of 60% on additional QE set-off against 70% of SI |
5 |
Incentives |
|
Years |
Application received from 30.10.2021 to 31.12.2025 | ||
Digital Technology Provider New company |
Income tax rate of 0% to 10% |
10 |
Existing company diversifying into new services or new segments |
Income tax rate of 10% |
10 |
Digital Infrastructure Provider |
ITA of 100% on QE set-off against 100% SI |
10 |
Incentives |
Years |
|
Iskandar Malaysia | ||
The following are three-tier package incentives for approved companies in Medini: |
||
|
Income tax exemption of SI derived from rental or disposal of a building located in an approved area until YA 2025 (application received by 31.12.2025) | - |
|
Income tax exemption of SI derived from the provision of management, supervisory or marketing services to approved developers until 2024 |
- |
|
Income tax exemption of SI derived from qualifying activities (application received by 31.12.2024); or | 10 |
ITA of 100% of QE set-off against 100% of SI |
5 | |
Non-resident |
Withholding tax exemption on royalty and technical fee received from IDR status company |
10* |
Knowledge workers working in Iskandar Malaysia (applications received by 31.12.2022) |
Income tax at 15% on chargeable income from employment with a designated company engaged in qualified activities |
- |
|
||
East Coast Economic Region (ECER) |
||
|
Income tax exemption of SI; or |
10 |
Income tax exemption equivalent to 100% of QE |
5 |
|
Stamp duty exemption on instruments of transfer of real property or lease of land or building used for the purpose of carrying on a qualifying activity (executed by 31.12.2024) |
- |
|
Qualifying person undertaking special qualifying activity |
Income tax exemption of 70% to 100% of SI and for a period as determined by the MoF; or Income tax exemption equivalent to 60% to 100% of QE incurred and within a period as determined by the MoF |
- |
Approved developer undertaking development in industrial park or free zone |
Income tax exemption of SI derived from:
|
10 |
Approved park managers |
Income tax exemption of SI derived from the provision of park management services in the industrial park or free zone |
10 |
Approved development manager |
Income tax exemption of SI derived from the provision of management, supervisory or marketing services relating to the development of an industrial park or free zone |
10 |
Company investing in a related company |
Single deduction equivalent to the value of investment made into a related company carrying out qualifying activity or special qualifying activity |
- |
Company or individual who sponsors any hallmark event carried on in ECER |
A deduction against business income of an amount not exceeding RM1 million per YA in respect of contribution in cash or in kind |
|
Knowledge worker residing and employed in ECER during the period 1.1.2022 to 31.12.2024 | Income tax rate of 15% in respect of chargeable income from employment with a designated company in ECER | |
|
||
Investors who make strategic investments in SCORE can apply for customised special incentive packages. |
||
|
||
(Applications received by 31.12.2022) |
||
Resident company undertaking qualifying activities | Income tax exemption of SI equivalent to 100% QE incurred for sectors of:
|
5
10
|
Income tax exemption of SI for sectors of:
|
5
10
|
|
Transfer of real property used in a qualifying tourism project | Stamp duty exemption on instruments executed by 31.12.2022. |
- |
Incentives |
Years |
|
Kindergarten |
Tax exemption of SI derived from the provision and maintenance of the kindergarten business |
5 |
Non-profit oriented school / international school |
Tax exemption of SI derived from the management of the school |
- |
Private / International school |
Further deduction for expenses incurred for overseas promotion (not exceeding RM100,000 per YA) |
- |
Private higher education institution (PHEI) |
ITA of 100% on QE set-off against 70% of SI (PHEI in the science field undertaking additional investment to upgrade equipment or expand their capacity) |
10 |
Further deduction for promotion of export of higher education |
- |
|
Single deduction of the expenses incurred for the development and compliance of new courses claimed over 3 years |
- |
|
Import duty exemption for educational equipment |
- |
|
Non-resident franchisor |
Withholding tax exemption on royalty income for providing approved franchised education or training programmes to PHEI |
- |
New or existing technical / vocational training institute |
ITA of 100% on QE set-off against 70% of SI |
10 |
Export of private education |
Exemption of income equal to 50% of the value of increased exports deducted against 70% of SI |
- |
Company providing / sponsoring scholarships |
Single deduction on expenditure incurred for the provision of scholarship |
- |
Double deduction for provision of scholarships to qualifying Malaysian students to pursue technical and vocational certificate, diploma, bachelor’s degree, master’s degree or doctor of philosophy (scholarship agreement executed from 1.1.2022 to 31.12.2025) | ||
Double deduction for provision of internship programme / Structured Internship Programme approved by Talent Corporation Malaysia Berhad (until YA 2025) |
||
Double deduction for training costs under the Professional Training and Education for Growing Entrepreneurs (PROTÉGÉ-Ready to Work (RTW)) Programme |
||
Single deduction for expenditure incurred for the provision of practical training to Malaysian resident non-employees |
||
Single deduction for pre-commencement of business training expenses for potential employees |
||
Double / further deduction for expenditure on approved training programmes incurred by companies which do not contribute to Human Resources Development Fund |
Incentives |
||
Real Estate Investment Trust (REIT) / Property Trust Fund (PTF) | ||
|
||
Unit Trust |
||
Tax exemption on interest income from any licensed bank / development financial institution except in the case of a unit trust which is a wholesale fund which is a money market fund. |
||
Tax exemption on gains on realisation of investments |
||
Tax exemption on certain interest or discount – Refer to the chapter on “Income exempt from tax” |
||
Closed-end fund company |
||
Tax exemption on gains on realisation of investments |
||
Tax exemption on certain interest or discount – Refer to the chapter on “Income exempt from tax” |
||
Fund management |
||
Tax exemption on SI derived from the business of providing fund management services in respect of (until YA 2023):
|
||
Islamic Finance |
||
Issuance of Sukuk and Retail Sukuk under principles of Wakalah |
(until YA 2025) |
|
Issuance cost of SRI Sukuk |
Tax deduction is given on the issuance costs of SRI Sukuk approved, authorised by or lodged with the SC (until YA 2023, extended to YA 2027) |
|
Issuance cost of SRI-linked Sukuk | Tax deduction is given on the issuance costs of SRI-linked Sukuk that is approved or permitted or deposited with the SC. (w.e.f YA 2023 to YA 2027) | |
Company that establishes a SPC solely for the purpose of issuance of Islamic securities |
Single deduction for cost of issuance of Islamic securities incurred by a Special Purpose Company (SPC) |
|
Islamic Securities Selling and Buying (ISSB) | Income tax exemption on income arising from ISSB (w.e.f. YA 2024) | |
Islamic Financial Activities under Labuan International Business and Financial Centre | Income tax exemption for 5 years for a Labuan entity that undertakes Islamic financial related trading activities such as Islamic digital banking, Islamic digital bourses, ummah-related companies and Islamic digital token issuers. (w.e.f. YA 2024 to YA 2028) |
Applications received from 14.10.2023 until 31.12.2027 Global Services Hub tax incentive based on outcome-based approach on service income, or services & trading income as follows: |
||
New company • Income tax rate of 5% (Tier 1) or 10% (Tier 2) |
5+5 |
|
Existing company • Income tax rate on value-added income at 5% (Tier 1) or 10% (Tier 2) |
5 |
|
Non-citizen individuals (monthly salary of at least RM35,000) holding key / C-Suite positions | Income tax at 15% (up to 3 individuals) | 3 |
Incentives |
Years |
|
Green technology (GT) (Applications received by 31.12.2023) |
||
Company undertaking qualifying GT project / purchase of GT assets | ITA of 100% on QE set-off against 70% of SI |
3 |
Company undertaking GT services | Income tax exemption of 70% of SI | 3 |
Company undertaking solar leasing activities (Application period extended to 31.12.2026) | Income tax exemption of 70% of SI
|
5 |
|
10 | |
GT Project (Business purposes) (Applications received from 1.1.2024 until 31.12.2026)
|
||
|
ITA of 100% on QE set-off against 70% / 100% of SI | 5+5 |
|
ITA of 100% on QE set-off against 100% of SI | 5 |
|
ITA of 100% on QE set-off against 70% of SI | 5 |
GT Asset (Own consumption) (GT assets purchased from 1.1.2024 until 31.12.2026) |
||
|
ITA of 100% on QE set-off against 70% of SI | |
|
ITA of 60% on QE set-off against 70% of SI | |
Carbon capture and storage (CCS) (Applications received from 25.2.2023 to 31.12.2027) |
||
Companies undertaking CCS in-house activities | ITA of 100% on QE set-off against 100% SI | 10 |
Full import duty and sales tax exemption on equipment for CCS technology (w.e.f. 1.1.2023 to 31.12.2027) | ||
Tax deduction for allowable pre-commencement expense within 5 years from date of commencement of operation | ||
Companies undertaking CCS services | ITA of 100% on QE set-off against 100% SI, or Income tax exemption of 70% SI |
10 |
Full import duty and sales tax exemption on equipment for CCS technology (w.e.f. 1.1.2023 to 31.12.2027) | ||
Companies engaging CCS services |
Tax deduction for fees incurred for use of CCS services (w.e.f. YA 2023 to YA 2027) |
|
Voluntary Carbon Market | ||
Development of carbon projects registered with an international standards body recognised by Bursa Malaysia (Applications received from 1.1.2024 until 31.12.2026)
|
Further tax deduction up to RM300,000 for costs incurred on Development and Measurement, Reporting and Verification related to carbon projects (certified by Malaysia Green Technology and Climate Change Corporation), against the carbon credits income traded on Bursa Carbon Exchange | |
Smart Artificial Intelligence (AI)-Driven Reverse Vending Machine |
||
Contributions / sponsorships of smart vending machines which utilise smart AI |
Tax deduction for the contributions or sponsorships made from 1.4.2023 to 31.12.2024 and applications received in the same period |
Incentives |
Years |
|
Halal food production outside halal parks: |
||
|
ITA of 100% on QE set-off against 100% SI |
5 |
Halal industry players located in designated halal parks: |
||
New companies producing prescribed halal products |
100% tax exemption on QE; or |
10 |
Tax exemption on export sales |
5 |
|
Double deduction for costs in obtaining international quality standard certification |
- |
|
Import duty exemption on raw materials used for the development and production of halal promoted products |
- |
|
Halal park operators (HALMAS status) |
100% tax exemption; or |
10 |
100% tax exemption on QE |
5 |
|
Import duty exemption on equipment, components and machinery used in cold room operations |
- |
|
Halal logistics operators |
100% tax exemption; or 100% tax exemption on QE |
5 |
Import duty exemption on equipment, components and machinery used in cold room operations |
- |
|
Halal certification |
Double deduction for expenses incurred in obtaining halal certification issued by an approved certification body |
- |
Incentives |
Years |
|
Mines Wellness City (MWC) |
||
MWC developer (undertaking new development in MWC) |
Income tax exemption of 100% of SI from:
|
Note 1 |
|
Note 2 |
|
Stamp duty exemption of 50% on instruments of transfer or lease of land or building in the MWC executed by 31.12.2023 |
- |
|
MWC development manager |
PS with tax exemption of 100% of SI derived from providing management, supervisory or marketing services to MWC Developer in the MWC |
Note 3 |
MWC operator |
PS with tax exemption of 70% of SI derived from qualifying activities carried out in the MWC; or
(Applications received by 31.12.2026) |
5 |
Professional services |
||
Export of medical and dental services |
Further deduction of QE incurred for the purpose of the export of services / professional services |
- |
Charitable hospitals registered as Company Limited by Guarantee |
Income tax exemption equivalent to the amount of expenses incurred for charity | 5 |
Tax deduction up to 10% of aggregate income for donors. |
Incentives |
Years |
|
Medium & low cost hotels up to 3 star / Holiday camps & recreational projects / Convention centre / Tourism projects |
Income tax exemption of 70% of SI; or ITA of 60% on QE set-off against 70% of SI |
5 |
Reinvestment in hotels – companies expanding, modernising and renovating (up to 3 rounds of reinvestment) |
ITA of 60% on QE set-off against 70% of SI |
5 |
ITA of 100% on QE set-off against 100% of SI (4 and 5 star hotels in Sabah & Sarawak) |
5 |
|
Reinvestment in tourism projects (up to 2 rounds of reinvestment ) |
Income tax exemption of 70% of SI; or ITA of 60% on QE set-off against 70% of SI |
5 |
Extension and modernisation of existing hotel buildings |
Refer to the chapter on “Capital Allowance” |
- |
Sponsoring of any approved arts, cultural or heritage activity |
Single deduction of up to RM1,000,000 [of which only RM300,000 is allowed for sponsoring foreign arts, cultural or heritage activity] |
- |
Hotel / Tour operators | Further deduction on overseas promotion of tourism in Malaysia |
- |
Tour operators |
Accelerated Capital Allowance (ACA) (Initial Allowance (IA) of 20% & Annual Allowance (AA) of 40%) on QE incurred on the purchase of new locally assembled excursion bus (w.e.f. YA 2020 to YA 2024) |
|
International theme park for tourism project (New investment) |
PS with tax exemption of 100% of SI, or ITA of 100% on QE set-off against 70% of SI |
5 |
Promotion / organisation of conferences - companies whose main activities are not promoting / organising of conferences |
Income tax exemption of 100% of SI where at least 500 foreign participants are brought in annually through conferences hosted (w.e.f. YA 2020 to YA 2025) |
- |
Approved arts, cultural, sports and recreational activities organiser |
Income tax exemption of 50% of SI (w.e.f. YA 2020 to YA 2025) |
- |
Hoteliers which purchase Malaysian-made handicraft from handicraft entrepreneurs registered with Perbadanan Kemajuan Kraftangan Malaysia |
Special tax deduction up to RM150,000 for qualifying handicraft products expenditure incurred from 1.1.2023 to 31.12.2025 |
Incentives |
Years |
|
Non-resident person who receives income from a Malaysian shipping company |
Withholding tax exemption on income from:
|
- |
Company undertaking or intending to expand / diversify into integrated logistics service |
Income tax exemption of 70% of SI, or ITA of 60% on QE set-off against 70% of SI |
5 |
Ship building and repairing (Applications received from 1.1.2020 to 31.12.2027) |
||
New company |
PS with tax exemption of 70% of SI, or ITA of 60% of QE set-off against 70% of SI |
5 |
Existing company |
ITA of 60% of QE set-off against 70% of SI |
5 |
Incentives |
Years |
||
Main incentives |
|||
Manufacturers producing promoted products or engaged in promoted activities |
PS with tax exemption of 70% of SI; or ITA of 60% on QE set-off against 70% of SI |
5 |
|
Enhanced incentives |
|||
Manufacturer of selected machinery & equipment (M&E) and specialised M&E |
PS with tax exemption of 100% of SI; or |
10 |
|
ITA of 100% on QE set-off against 100% of SI |
5 |
||
High technology projects |
PS with tax exemption of 100% of SI; or ITA of 60% on QE set-off against 100% of SI |
5 |
|
Industrialised Building System (IBS) Components |
|||
Applications received by 31.12.2025
Companies producing IBS components or IBS system (at least 3 basic IBS components)
|
ITA of 60% on QE set-off against 70% of SI |
5 | |
Relocation of overseas business operations/facilities to Malaysia Manufacturing sector (applications received by 31.12.2024) |
|||
New company | 0% tax rate (new investment in manufacturing sector with capital investment of RM300 million - RM500 million) | 10 | |
0% tax rate (new investment in manufacturing sector with capital investment above RM500 million) | 15 | ||
Existing company | ITA of 100% on QE set-off against 100% of SI (for relocation of manufacturing operation with capital investment above RM300 million) |
5 | |
Automation capital allowance | |||
Refer to the chapter on “Capital Allowance” | |||
Reinvestment |
|||
Company undertaking qualifying project in expansion, modernisation, automation or diversification of existing manufacturing business
|
|||
Reinvestment under the New Industrial Master Plan 2030 (NIMP 2030) | |||
Companies which have exhausted their existing reinvestment allowance eligibility period and which increases capacity and investment in high-value activities under the NIMP 2030 (application received from 1.1.2024 to 31.12.2028) | ITA based on outcome approach: • Tier 1 - QE of 100% set-off against 100% of SI • Tier 2 - QE of 60% set-off against 70% of SI |
||
Special reinvestment allowance (RA) | |||
A special RA granted for YA 2020 to YA 2024 for existing manufacturing companies which have exhausted their existing RA period and special RA granted for YA 2016 to YA 2018. |
|||
Industry4WRD Manufacturing and manufacturing-related services sector |
Single deduction of up to RM27,000 paid to the Malaysian Productivity Corporation on readiness assessment expenses of I4.0-RA incurred from 2.1.2019 to 31.12.2025 (until YA 2026) |
||
Anchor Company |
Double deduction of up to RM1 million per year for 3 consecutive YAs on qualifying operating expenditure of product development, upgrading capabilities and skill training of vendors incurred in implementing Industry4WRD Vendor Development Program as verified by the Ministry of International Trade and Industries (MITI) (MOU signed between company and MITI from 1.1.2019 to 31.12.2021) | ||
Allowance for increased exports (AIE) |
|||
Manufacturer attaining: |
Rates of allowance, deductible up to 70% of SI: |
|
|
|
|
- |
|
|
|
- |
|
Enhanced AIE |
|||
Similar to Enhanced AIE incentives under “Agriculture” sector |
|||
Deductions |
|||
Manufacturer shipping goods from Sabah or Sarawak to any port in Peninsular Malaysia |
Further deduction of freight charges incurred on the shipment of goods |
- |
|
Manufacturers |
Further / double deduction on the promotional expenditure incurred in seeking opportunities or in creating or increasing demand for the exports |
- |
|
Anchor company which participates in a Vendor Development Programme | Double deduction of up to RM300,000 (RM500,000*) per YA for 3 consecutive YAs on QE incurred by an anchor company to carry out prescribed activities. (MOU signed between company and MITI from 1.1.2014 to 31.12.2020, *for MOU signed with Ministry of Entrepreneur Development and Cooperatives from 1.1.2021 to 31.12.2025) |
Incentives |
Years |
|
Malaysia Digital (MD) Status (formerly known as MSC Malaysia Status) |
||
MD status company that undertakes qualifying activity by utilising MD promoted tech enablers |
Reduced tax rate on qualifying intellectual property (IP) income and non-IP income, or ITA |
up to 10
5 |
Import duty exemption for multimedia equipment |
- |
|
Others |
|
|
Owner of a building in Cyberjaya Flagship Zone used for his business or rented to an approved MD status company |
IBA at 10% of the qualifying building expenditure incurred for approved activities |
10 |
Incentives |
Years |
|
Approved business eligible for special incentive scheme (pre-package) |
Tax exemption of SI; or |
up to 15 |
Tax exemption equivalent to amount of QE set-off against SI (rates and period to be determined by MoF) |
up to 10 |
|
Approved services projects in areas of transportation, communications and utilities |
Investment Allowance of 60% to 100% of QE set-off against 70% to 100% of SI; or |
5 |
Tax exemption of 70% to 100% of SI (rates and period to be determined by MoF) |
5 or 10 |
|
IBA |
- |
|
Import duty exemption on machinery and equipment |
- |
|
Projects / products of national strategic importance |
PS with tax exemption of 100% of SI or ITA of 100% on QE set-off against 100% of SI |
5 |
Incentives |
Years |
||
Chargeable person carrying out petroleum operations in qualifying project |
Investment Allowance of 60% of QE set-off against 70% of SI in respect of a qualifying project or infrastructure asset as determined by the Minister |
10 |
|
Labuan International Commodity Trading Company which undertakes qualifying activity under the Global Incentives for Trading programme |
Tax exemption on income derived purely from the trading of physical and related derivatives instruments of liquefied natural gas (LNG) |
3 |
|
Taxed at 3% on chargeable profits derived from the trading of physical and related derivatives instruments of:
|
- | ||
Investment in Late-Life Asset (LLA) projects in upstream petroleum industry (LLA Production Sharing Contracts awarded from 1.1.2020 to 31.12.2029) | Petroleum income tax rate at 25% |
||
ACA (IA 20%, AA 40%) within 2 years | |||
Carry back of losses from decommissioning activities to be utilised against income for 2 consecutive immediate preceding YAs |
|||
Exemption from export duty on petroleum products |
|||
Pengerang Integrated Petroleum Complex (PIPC) | |||
Chemical and petrochemical manufacturing company with minimum investment of RM500 million | • Income tax rate of 5% / 10% on income from qualifying activities, or • ITA of 100% set-off against 70% of SI. |
Up to 10 | |
Developers of industrial areas in the PIPC | Income tax rate of 10% on the income from sale or rental activities for a qualifying project. | 10 |
Incentives |
Years |
|
In-house R&D project |
ITA of 50% on QE set-off against 70% of SI |
10 |
Contract R&D status company |
PS with tax exemption of 100% of SI; or |
5 |
ITA of 100% on QE set-off against 70% of SI |
10 |
|
R&D status company | ITA of 100% on QE set-off against 70% of SI |
10 |
Any person making contribution / payment to approved research institute /company (conditions apply to related companies)
|
Double deduction for the following expenditure:
|
-
|
In-house R&D by a person resident in Malaysia |
Double deduction for approved in-house R&D expenditure of which any amount incurred outside Malaysia for that year is not more than 30% of the total expenditure for that year |
- |
R&D undertaken by a person or on his behalf |
Single deduction for R&D expenditure |
- |
Building used for approved research or by an R&D or contract R&D company |
IBA (IA 10%, AA 3%) |
- |
Qualifying company undertaking commercialisation of public* R&D findings (investee company) (*including private higher learning institutions) |
Tax exemption of SI derived from the commercialisation of R&D findings (including non-resource based) (Applications received by 31.12.2025) |
10 |
Qualifying company investing in commercialisation of public* R&D findings, (investee company) (*including private higher learning institutions) |
Single deduction for value of investment made to its related company which undertakes the commercialisation of R&D findings (including non-resource based) (Applications received by 31.12.2025) | - |
Approved New Technology Based Firm |
Tax exemption on adjusted income consisting of the development or commercialisation of technological innovations |
5 |
Incentives |
Years |
|
Approved property developer undertaking development in TRX |
Income tax exemption of 70% of SI from the:
|
5 |
TRX Marquee status company | ACA (IA 20%, AA 40%) on renovation cost on a building or part of a building located in TRX (until 31.12.2025) |
- |
IBA of 10% on a commercial building within TRX (eligibility period until 31.12.2025) | 10 | |
50% further deduction for rental of commercial building used for the purpose of its business in TRX (eligibility period until 31.12.2025) | 10 | |
Single deduction for prescribed relocation costs to relocate part or whole business to TRX. Relocation to take place no later than 31.12.2025. |
Incentives |
Years |
|
|
||
Further deduction for advertising expenditure and professional fees incurred to promote / advertise Malaysian brand names |
||
Double deduction for cost of obtaining quality system and standards certification |
||
Single deduction for cost of obtaining accreditation for a laboratory or as a certification body |
||
Export incentives for services sector |
||
Further deduction of QE for the purpose of export of services / professional services |
||
Allowance for increased export equal to 50% of the value of the increased export of qualifying services, set-off against 70% of SI |
||
Employer related incentives |
||
Further deduction for the remuneration paid to an employee who is physically or mentally handicapped |
||
Further deduction on expenditure incurred for the provision and maintenance of childcare centre for the benefit of their employees or childcare allowance given to their employees |
||
Further deduction for employers hiring workers affected by accidents or critical illnesses and certified by SOCSO to be fit to work |
||
Further deduction for the employment of senior citizens (60 years and above) or ex-convicts, inmates / ex-inmates of Henry Gurney School under the Malaysian Prison Department, and protection and rehabilitation institutions and care centres under the Social Welfare Department, with a monthly remuneration up to RM4,000 (until YA 2025) |
||
Single deduction for provision of personal protective equipment to employees, purchase of thermal scanners and COVID-19 testing |
||
Further deduction for remuneration incurred for recruiting former national athletes (YA 2023 to YA 2024) | ||
Listing expenses |
||
Single deduction of up to RM1.5 million on specified listing costs incurred by prescribed technology-based companies, listing on ACE or LEAP, and from YA 2023 on Bursa Main Market (until YA 2025) | ||
Social responsibility |
||
Single deduction for approved expenditure incurred on environmental preservation and conservation projects, or for maintenance of heritage building certified under the National Heritage Act 2005 |
||
Tax deduction for contributions or sponsoring activities related to tree planting, environmental preservation and conservation awareness projects verified by Forest Research Institute Malaysia (applications received from 1.1.2024 to 31.12.2026) | ||
Tax deduction for contributions to approved Social Enterprise. | ||
Income tax exemption on all income of an accredited Social Enterprise up to 3 YAs (applications received by 31.12.2023, extended to 31.12.2025.) | ||
Tax deduction up to RM50,000 for each YA on the following expenditure incurred on Environmental, Social and Governance (ESG) related expenditure (w.e.f YA 2024 until YA 2027):
|
||
Others |
||
Tax deduction up to 10% of aggregate income for contributions made to the Tabung Komuniti Filem dan Pembangunan Filem Kenegaraan under FINAS. |
||
Special income tax rate ranging from 0% to 10% for foreign film production companies which conduct filming in Malaysia | ||
Tax deduction up to 10% of aggregate income, for contribution to nonprofit-based organisations involved in the development of sport at grassroot levels. |