Malaysia's Green Investment Tax Allowance (GITA) is one of the most generous corporate solar incentives in Southeast Asia, yet most Malaysian SME owners have never heard of it. Under GITA, a company that installs a qualifying solar PV system can claim a 100% Investment Tax Allowance (ITA) on the qualifying capital expenditure — potentially reducing its tax payable to near zero for multiple years.
This guide explains GITA from first principles: what it is, who qualifies, how to calculate the tax saving, how to apply, and how to stack it with other incentives for maximum benefit.
What is GITA? The Legal Foundation
GITA is governed by the Income Tax Act 1967, Schedule 7A (Green Technology Investment). It was first introduced in 2013 and has been renewed and expanded in successive Budget announcements. The current iteration — extended through 2026 in Budget 2025 — covers a broad range of green technology assets including solar PV systems, energy storage systems, and energy-efficient equipment.
Critically, GITA is an Investment Tax Allowance (ITA), not a tax deduction. This distinction matters enormously:
- Tax Deduction: Reduces your taxable income. On a RM 200,000 solar system, a full deduction saves you RM 200,000 × 24% (SME tax rate) = RM 48,000 in tax
- Investment Tax Allowance (100% ITA): Allows you to set off 100% of the qualifying capital expenditure directly against your statutory income — potentially offsetting RM 200,000 of income regardless of your tax rate
In practice, for a company with strong profitability, GITA's 100% ITA is significantly more valuable than a simple deduction.
GITA Solar: Key Terms and Conditions (2026)
| Feature | Details |
|---|---|
| Allowance Rate | 100% ITA on qualifying capital expenditure |
| Offset Cap Per Year | Up to 70% of statutory income (30% remains taxable) |
| Carry-Forward Period | 5 years (unused allowance carried forward until exhausted) |
| Eligible Entities | Companies incorporated in Malaysia (Sdn Bhd, Bhd) — NOT sole proprietors or partnerships |
| Qualifying Assets | Solar PV panels, inverters, mounting structure, battery storage, EV chargers (all certified by SIRIM/GreenTech Malaysia) |
| Asset Condition | New assets only (not second-hand) |
| GreenTech Malaysia Certification | Required — system must be certified before claiming |
| Applicable Tax Rate | Companies taxed at 24% (or 17% for SMEs on first RM 600k chargeable income) |
| Incentive Period | Approved for assets purchased on or before December 31, 2026 |
| Administering Body | Malaysian Investment Development Authority (MIDA) for applications; LHDN for tax claims |
How GITA Works: A Step-by-Step Example
Let us use a real-world scenario. Scenario: Engineering SME, Petaling Jaya
- Company: Tekno Maju Engineering Sdn Bhd
- Annual statutory income: RM 800,000
- Tax rate: 24% (above RM 600k threshold)
- Solar installation: 50kWp rooftop system, total cost RM 170,000
- Year of installation: 2026
Year 1 Tax Calculation (Without GITA)
- Statutory income: RM 800,000
- Tax payable: RM 800,000 × 24% = RM 192,000
Year 1 Tax Calculation (With GITA)
- Statutory income: RM 800,000
- GITA allowance available: RM 170,000 (100% of solar capex)
- Maximum offset in Year 1: RM 800,000 × 70% = RM 560,000
- GITA applied: RM 170,000 (fully exhausted in Year 1 — less than the 70% cap)
- Revised taxable income: RM 800,000 − RM 170,000 = RM 630,000
- Tax payable: RM 630,000 × 24% = RM 151,200
- Tax saved via GITA: RM 40,800
Combined with estimated electricity savings of RM 5,500–7,000 per month for a 50kWp system, the all-in first-year benefit exceeds RM 100,000.
Important note: GITA reduces your effective cost of the solar installation. A RM 170,000 system that saves RM 40,800 in tax has a net cost of only RM 129,200 — before electricity savings are counted. This shrinks the payback period significantly.
What Qualifies as GITA-Eligible Solar Expenditure?
Not every line item on your solar invoice qualifies. Here is what LHDN typically accepts as qualifying capital expenditure under Schedule 7A:
- Qualifying: Solar PV panels, inverter(s), battery storage system, mounting and racking structure, AC/DC cabling, monitoring system hardware, SCADA equipment, switchgear and protection devices
- Qualifying (with documentation): Civil and structural works directly required for the solar system (e.g., roof strengthening, concrete ballast pads)
- Not qualifying: Professional fees (engineering, legal), SEDA application fees, GST, installation labour (unless capitalised as part of asset cost per FRS 116)
Your solar installer should provide an itemised invoice that clearly separates qualifying asset costs from service fees. Trexon's commercial quotations are structured to maximise the qualifying portion for GITA purposes.
GITA Application Process: How to Apply
Step 1: Obtain GreenTech Malaysia Certification
Before claiming GITA, your solar installation must be certified by GreenTech Malaysia (Malaysian Green Technology and Climate Change Corporation). Submit an application through the GreenTech Malaysia portal with your system specifications, installer credentials, and SEDA commissioning certificate.
Processing time: 4–8 weeks. Fee: RM 500–2,000 depending on system size.
Step 2: Submit MIDA Application (Optional but Recommended)
For larger systems (above 500kW) or combined technology investments, a formal MIDA application provides an approval letter that strengthens your LHDN claim. For smaller systems, LHDN accepts the GreenTech Malaysia certificate directly without MIDA approval.
Step 3: Claim in Your Annual Tax Return
In your company's income tax return (Form C), declare the GITA allowance under Schedule 7A. Attach the GreenTech Malaysia certificate and asset purchase documentation. Your tax agent handles the specific LHDN form format.
Stacking GITA with GTFS: Maximum Benefit Strategy
GITA can be combined with the Green Technology Financing Scheme (GTFS) — a government-subsidised loan scheme with a 2% interest rate rebate for green technology purchases. The optimal structure:
- Finance the solar system with a GTFS-eligible loan (bank provides 2% interest subsidy via government guarantee)
- Claim 100% GITA ITA on the full system cost as a tax offset
- Use electricity savings to service the loan
- After loan repayment, all electricity savings flow directly to profit
In the best-case scenario, a company can finance a solar system at subsidised interest rates, recover 100% of the cost through tax offsets over 1–3 years, and then enjoy decades of near-zero electricity cost — all without significant upfront cash outlay.
For more on stacking incentives, see our guide: Complete Solar Incentives Malaysia 2026 — Every Scheme Explained.
GITA vs Green Income Tax Exemption (GITE): Which is Better?
A separate incentive called the Green Income Tax Exemption (GITE) offers tax exemption on statutory income from green technology activities. GITE applies to companies that generate and sell green energy (e.g., IPPs, CGPP participants) rather than companies installing solar for self-consumption. If your business sells excess solar to TNB or third parties under a PPA, your tax consultant should evaluate whether GITE provides more value than GITA in your specific situation.
Who Should Act Now
GITA's current approved period ends December 31, 2026. To claim the allowance, your qualifying assets must be purchased and installed by this date. Companies considering solar should:
- Get a commercial solar assessment from Trexon — see our commercial solar solutions page
- Confirm GITA eligibility with your tax consultant before proceeding
- Ensure your installer provides GITA-compatible documentation (itemised invoice, GreenTech Malaysia application support)
- Budget 6–10 weeks from site assessment to installation completion — leaving time to certify before year-end
Trexon's commercial team handles the full documentation package for GITA claims including GreenTech Malaysia application support. Contact us for a commercial proposal.