Green Energy Incentives

Our government is actively promoting renewable energy by providing fiscal redemption of corporate tax, namely Capital Allowance & Investment Tax Allowance.  The ITA is implementation by MIDA. If your corporate tax falls in the 24% tax bracket, the government actually absorbs 48% of this PV investment cost. (24% for ITA and another 24% for CA). This simply means you are paying 52% of the total PV project cost.

Investment Tax Allowance
According to MIDA, the Investment Tax Incentive is entitled for 100% qualifying capital expenditure (QCE). It can be utilized to offset against 70% of statutory income, any balance to be carried forward to the subsequent year of assessments until fully taken up.

Capital Allowance
PV projects are eligible for another 24% cost reduction by means of Capital Allowance. For the PV project, the qualifying expenditure is categorized under Plant & Machinery which could be redeemed for 20% in the first year, and 14% at subsequent year until it is fully taken up too.