Malaysian companies (Sdn Bhd/Bhd) installing solar panels can claim both Schedule 3 Capital Allowance (20% initial + 14% annual) AND 60% GITA — effectively recovering up to 48% of system cost through tax deductions. This guide explains the exact numbers, who qualifies, and how to 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, additional tax incentive specifically for green technology investments. Under Schedule 7A of the Income Tax Act 1967, companies investing in qualifying green assets — including solar PV — receive a 60% tax allowance on qualifying capital expenditure (capex), on top of normal capital allowance.
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 | Up to 48% of system cost | RM4,000 flat rebate |
| System Size | No cap (50kWp+ recommended) | Residential NEM only |
| Processing Body | LHDN (CA) + MIDA (GITA) | SEDA Malaysia |
| Application Timing | CA: any time. GITA: before installation | After installation complete |
| Deadline | GITA: Dec 31, 2026. CA: ongoing | Ongoing (subject to fund availability) |
| Documentation | Moderate (invoice, cert, MIDA letter) | Simpler (SEDA application) |
The CA claim is straightforward (via annual Form C filing). GITA requires an upfront MIDA application before installation. Both run in parallel and complement each other.
Obtain quotes from SEDA-registered PV Service Providers (RPVSP). Request MIDA-formatted quotations that itemize equipment by model, specification, and IEC certification — this format is required for MIDA review.
File the GITA application through the MIDA InvestMalaysia portal BEFORE any installation begins. Retroactive GITA applications are not accepted. Required: MIDA-formatted quote, equipment IEC certs, company tax docs.
MIDA typically responds in 4–8 weeks. The MIDA approval letter is your key document for annual GITA claims. File it permanently in your company records — you will reference it each year for 5 years.
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.
100kWp rooftop system at a plastic components manufacturer in Shah Alam. System cost RM280,000. Company tax rate: 24%.
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 will calculate exact CA + GITA savings for your company, prepare MIDA-formatted documentation, and coordinate with your tax agent — so you capture every ringgit of available tax incentive.