Special Investment Tax Allowance for E&E Industry

Special Investment Tax Allowance for E&E Industry

Special Investment Tax Allowance for E&E Industry

Special Investment Tax Allowance for E&E Industry

The Special Investment Tax Allowance for the Electrical & Electronic (E&E) Sector incentive was announced in the National Budget 2020.

The Income Tax (Exemption) (No.10) Order 2021 (“Exemption Order”) has been gazetted and is effective from 1 January 2020.

Key salient features of Special Investment Tax Allowance for E&E Industry

  • Investment Tax Allowance of 50% on qualifying capital expenditure to be offset against 50% of Statutory Income.

  • The exemption period is valid for a period of 5 years starting from the date of the approval letter.

  • This Special Investment Tax Allowance is to encourage companies in the E&E sector that have exhausted the Reinvestment Allowance in Malaysia to further reinvest in Malaysia.

  • Manufacturing company incorporated under the Companies Act, 1965/2016, and residents in Malaysia.

  • Possess valid Business License from the relevant Local Authority.

  • Possess Manufacturing License (ML) from MITI or Confirmation Letter of Exempted from Manufacturing License from MIDA.

  • The applicant company is engaged in manufacturing activities in the

  • E&E sector.

  • The minimum investment in the related proposed projects shall be at least RM1.5 million in capital expenditure within a period of five (5) years.

  • The company to incur the minimum yearly operational expenses (as proposed by the company);

  • The company to hire a minimum number of Malaysian full-time workers (as proposed by company).

  • The applicant company shall at least satisfy one (1) of these

  • following conditions

    1. Vendor Development Program or

    2. Human Capital Development Program

Source :

MIDA guideline

https://www.mida.gov.my/wp-content/uploads/2021/03/GD_ITA-EE16032021.pdf

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