Model your project savings and peak-demand reduction
Calculate ROIMalaysian 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.
Key Takeaways
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. Confirm that the specific models are listed on MyHIJAU before you buy.
Enter your system cost and corporate tax rate to see the tax value of capital allowance and of GITA, and your payback period with GITA.
* Energy savings assume RM2,400/kWp, 3.5 peak sun hours/day, all output used on site and the Non-Domestic Low Voltage rate of RM0.5068/kWh (MV General sites save less: RM0.2983/kWh energy). GITA is subject to MGTC verification and is set off against up to 70% of statutory income each year. Whether capital allowance and GITA can both be claimed on the same asset must be confirmed with your tax agent.
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 | SuRIA Home |
|---|---|---|
| Who It's For | Businesses (confirm eligibility with your tax adviser) | Individual homeowners (Malaysian citizens) |
| How Applied | Tax deduction on Form C | Cash rebate paid to the TNB account holder |
| Maximum Benefit | Depends on eligibility and utilisation | RM600/kWac, capped at RM3,000 |
| System Size | Non-domestic Solar ATAP capped at 75% of MD, up to 1,000 kWac | Residential Solar ATAP (5 kWac single / 15 kWac three phase) |
| Processing Body | LHDN (CA) + MGTC (GITA route) | TNB |
| Application Timing | CA: annual filing. GITA: after commissioning, by 31 Dec 2026 | No application: TNB notifies you |
| Timing | Confirm current GITA rule; CA follows applicable filing rules | Check current programme |
| Documentation | Invoice, asset and current scheme evidence | None from the homeowner |
Capital allowance and GITA have separate eligibility and timing rules. GITA is applied for after commissioning; confirm your claims with your tax adviser.
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.
GITA Asset applications go to MGTC after the system is commissioned and must be submitted by 31 December 2026. Plan the project so installation and TNB commissioning finish in time; the whole process typically takes 6–10 weeks including approvals.
Trexon installs the system (on-site time depends on system size) and handles the Solar ATAP application. Keep the commissioning report, invoices and equipment specifications for your GITA application and tax records.
After commissioning, submit the GITA Asset application to MGTC with invoices and commissioning evidence. It must be submitted by 31 December 2026. Subject to MGTC verification.
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 up to 70% of statutory income each year; any unused balance is carried forward until fully used.
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.
Illustrative scenario, not a Trexon project. Actual tax savings depend on company-specific statutory income and applicable tax rate; confirm capital allowance and GITA treatment with your tax agent.
Trexon's commercial team can prepare an illustrative evidence pack; your tax adviser and MGTC/LHDN must confirm the claim, amount and current application route.