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Configure solarMalaysian companies may have separate capital-allowance and GITA questions when installing solar. Eligibility, qualifying expenditure, statutory-income limits, timing and the applicable tax rate determine the outcome. This guide separates those concepts and flags where LHDN, MGTC and a tax adviser must confirm the claim.
Under Schedule 3 of the Income Tax Act 1967, solar photovoltaic (PV) systems are classified as "Plant & Machinery" — a qualifying category of fixed assets that companies can depreciate for tax purposes through Capital Allowance (CA). Unlike accounting depreciation (which follows accounting standards), CA follows specific rates set by LHDN regardless of actual useful life.
Important: CA is not a grant. It reduces your taxable income — so the actual cash saving depends on your corporate tax rate (17% for SMEs earning under RM600K, or 24% for larger companies).
GITA is a separate incentive for qualifying green technology investments. The applicable asset category, certification, applicant, timing and statutory-income rules must be checked against current MGTC guidance before any percentage is treated as a cash benefit.
For companies purchasing qualifying green assets for own consumption (e.g., solar panels on your own factory). Applied to the purchasing company. This is the most common path for B2B solar.
For companies providing qualifying green technology services or products to third parties. Applicable to solar developers or ESCOs selling green tech solutions.
GITA is administered by MGTC (Malaysian Green Technology & Climate Change Corporation). Equipment must carry MyHIJAU Mark to qualify. All Trexon-supplied panels and inverters are MyHIJAU certified.
Enter your system cost and corporate tax rate to see your combined CA + GITA tax savings and effective payback period.
* Energy savings based on RM0.35/kWh average commercial tariff and 4.5 peak sun hours/day. Tax savings are estimates — actual amounts depend on your company's statutory income and tax position. Consult a tax agent for precise calculations.
Based on a RM200,000 solar system. Year 1 combines Initial Allowance (20%) and Annual Allowance (14%) = 34% total. Subsequent years claim 14% annually until full cost is written off.
| Year | Initial Allowance | Annual Allowance | Total CA | Tax Saved (24%) |
|---|---|---|---|---|
| Year 1(IA + AA) | RM 40,000 | RM 28,000 | RM 68,000 | RM 16,320 |
| Year 2 | — | RM 28,000 | RM 28,000 | RM 6,720 |
| Year 3 | — | RM 28,000 | RM 28,000 | RM 6,720 |
| Year 4 | — | RM 28,000 | RM 28,000 | RM 6,720 |
| Year 5 | — | RM 28,000 | RM 28,000 | RM 6,720 |
| Year 6 | — | RM 20,000 | RM 20,000 | RM 4,800 |
| Total | RM 40,000 | RM 160,000 | RM 200,000 | RM 48,000 |
CA claim per year (RM200,000 base)
CA is claimed annually in your company's income tax return (Form C) filed with LHDN. Your tax agent will include a Capital Allowance Schedule listing the solar asset, purchase date, cost, IA/AA rates, and cumulative CA to date. No separate LHDN application is required — it is simply included in your annual filing.
Two completely separate incentive schemes exist for solar in Malaysia — one for businesses, one for homeowners. They cannot be cross-applied.
| Factor | CA + GITA | SolaRIS |
|---|---|---|
| Who It's For | Companies (Sdn Bhd / Bhd) | Individual homeowners |
| How Applied | Tax deduction on Form C | Cash rebate via SEDA |
| Maximum Benefit | Depends on eligibility and utilisation | Check current programme |
| System Size | No cap (50kWp+ recommended) | Residential NEM only |
| Processing Body | LHDN (CA) + MGTC (GITA route) | Check current programme |
| Application Timing | CA: any time. GITA: before installation | After installation complete |
| Timing | Confirm current GITA rule; CA follows applicable filing rules | Check current programme |
| Documentation | Invoice, asset and current scheme evidence | Check current programme |
Capital allowance and GITA have separate eligibility and timing rules. Confirm the current filing and application route with LHDN, MGTC and your tax adviser before installation.
Obtain quotes from SEDA-registered PV Service Providers (RPVSP). Keep itemised equipment, model, specification and certification evidence; confirm the current MGTC application format before filing.
Confirm the current MGTC application route, timing and evidence requirements before installation or expenditure. Do not rely on a legacy MIDA workflow or assume retrospective eligibility.
Keep the current MGTC confirmation and supporting evidence with your tax records. Processing time and claim documentation vary by scheme and should not be promised without current written guidance.
Trexon installs the system and provides the IEC 62446 Commissioning Report upon completion. Apply for TNB grid connection and SEDA Solar ATAP registration. Obtain MyHIJAU certification documentation for all major components.
Record the solar system as a fixed asset (Plant & Machinery) in your company's Fixed Asset Register. Include: purchase date, invoice number, cost, IA rate (20%), AA rate (14%), and estimated useful life. Your accountant handles this.
Each year, your tax agent includes the Capital Allowance Schedule in your company's Form C filing with LHDN. Year 1: IA 20% + AA 14% = 34%. Years 2–5: 14% per year. GITA: 60% allowance set off against 70% of statutory income. Continue for 5 years until GITA is fully utilized.
Modeled scenario only: a 100kWp rooftop system at a hypothetical manufacturer. System cost, tax rate and utilisation must be replaced with the company's documented facts.
Case study figures are illustrative based on real project parameters. Actual tax savings depend on company-specific statutory income and applicable tax rate.
Trexon's B2B team can prepare an illustrative evidence pack; your tax adviser and MGTC/LHDN must confirm the claim, amount and current application route.