Malaysian businesses have a hard deadline staring them down: December 31, 2026. That is the final day to commission a solar installation and qualify for the Green Investment Tax Allowance (GITA) — a 60% tax deduction on your qualifying capital expenditure. For a factory spending RM 500,000 on solar, that means RM 300,000 off your taxable income. This guide tells you exactly how to claim it before the window closes.
What is GITA? The Green Investment Tax Allowance Explained
GITA is a Malaysian government incentive administered by the Malaysian Investment Development Authority (MIDA) and gazetted under the Promotion of Investments Act 1986. It provides a 60% investment tax allowance on qualifying capital expenditure incurred on approved green technology assets — including solar photovoltaic systems.
Unlike a tax rebate (which reduces tax payable directly), a tax allowance reduces your chargeable income. This means the actual tax saved depends on your company's effective tax rate:
- Company tax rate: 24% (standard Sdn Bhd)
- RM 500,000 solar investment × 60% GITA = RM 300,000 allowance
- RM 300,000 × 24% tax rate = RM 72,000 in actual tax saved
- Effective after-tax cost of your RM 500,000 system: RM 428,000
For SMEs taxed at 17% on the first RM 600,000 of chargeable income, the savings on that portion are RM 300,000 × 17% = RM 51,000. Either way, GITA dramatically improves your solar ROI and shortens the payback period.
GITA Solar Eligibility: Who Qualifies?
Not every business automatically qualifies. MIDA has specific criteria that your company and project must meet to receive GITA approval.
Company Requirements
- Incorporated in Malaysia under the Companies Act 2016
- Tax resident in Malaysia
- Principal activity must be in manufacturing, services, or agriculture (hospitality and real estate do not qualify)
- The solar installation must be for your own business consumption — not for resale or as a service to third parties
Project Requirements
- Solar PV system must be approved and commissioned by December 31, 2026
- System must be grid-connected (Solar ATAP or NEM for commercial)
- All equipment must meet SEDA Malaysia's approved list (panels, inverters, racking)
- Installation must be carried out by a SEDA-registered Energy Service Company (ESCO)
- MIDA approval must be obtained before work commences or within the same year of commissioning
Critical note: Trexon is a SEDA-registered ESCO. All our commercial and industrial installations are structured to meet GITA documentation requirements. Request a factory solar quote and we will flag your GITA eligibility in the assessment.
GITA Calculation Examples by System Size
The following examples use Malaysia's standard corporate tax rate of 24%. Savings will be lower at the 17% SME rate and higher for businesses with carried-forward losses (where GITA can offset future years).
| System Size | Approx. Investment | 60% GITA Allowance | Tax Saved (24%) | Effective Cost After GITA |
|---|---|---|---|---|
| 50kW | RM 120,000 | RM 72,000 | RM 17,280 | RM 102,720 |
| 100kW | RM 230,000 | RM 138,000 | RM 33,120 | RM 196,880 |
| 200kW | RM 420,000 | RM 252,000 | RM 60,480 | RM 359,520 |
| 500kW | RM 980,000 | RM 588,000 | RM 141,120 | RM 838,880 |
| 1MW | RM 1,850,000 | RM 1,000,000* | RM 240,000 | RM 1,610,000 |
* The 1MW system GITA allowance is capped at RM 1,000,000 per assessment year for commercial installations. Excess allowances can be carried forward to subsequent years.
How GITA Interacts with TNB Savings and MD Charge Reduction
GITA does not exist in isolation. When combined with TNB commercial tariff savings — particularly the Demand (MD) charge of RM 89.27/kW — the total financial case for factory solar in 2026 becomes exceptionally compelling.
Consider a food manufacturing plant with:
- Monthly TNB bill: RM 45,000
- Monthly MD charge component: RM 12,400 (139kW peak demand × RM 89.27)
- 200kW solar installation: RM 420,000
Combined returns over Year 1:
- Energy savings (reduced kWh consumption): RM 8,200/month = RM 98,400/year
- MD charge reduction (solar flattens peak demand by 60–70kW): RM 5,900/month = RM 70,800/year
- GITA tax saving: RM 60,480 (one-time)
- Total Year 1 benefit: RM 229,680
- Simple payback: under 3 years
See more factory solar case studies on our B2B solutions page.
Step-by-Step GITA Claim Process
The GITA claim process involves three parties: MIDA (approval), your installer (documentation), and LHDN (tax filing). Here is the complete sequence.
Phase 1: Pre-Installation (2–4 Weeks)
- Obtain solar system quotation from a SEDA-registered ESCO (like Trexon)
- Submit GITA application to MIDA via the MIDA Investment Portal (mida.gov.my) — include company profile, project description, and quotation
- MIDA reviews and issues a Letter of Approval (LOA) — typically within 15–30 working days
- Do not commence installation until LOA is received — this is a common and costly mistake
Phase 2: Installation (3–8 Weeks)
- Installation by SEDA-registered ESCO following TNB grid connection requirements
- TNB Net Energy Metering (NEM) or Solar ATAP commissioning completed
- Installer issues Commissioning Certificate — keep this; it is required for tax filing
- System must be commissioned by December 31, 2026
Phase 3: Tax Filing (Year-End)
- In your Year of Assessment 2026 company tax return (Form C), declare the GITA allowance under Schedule 7A of the Income Tax Act
- Attach: MIDA LOA, commissioning certificate, invoices, and payment proof
- GITA allowance reduces chargeable income for YA2026 — remainder carries forward to YA2027 and beyond until exhausted
- File with your auditor — GITA is a standard item for any tax-savvy corporate tax agent
Why December 31, 2026 Is a Hard Deadline
GITA for solar installations was extended under Malaysia's National Energy Transition Roadmap (NETR) to cover applications approved before December 31, 2026 and commissioned by the same date. There is no confirmed extension beyond 2026 at the time of writing. MIDA and the Ministry of Finance have not signalled a further extension, and past solar incentive programs (SolaRIS, NEM 3.0) have all ended on their gazetted dates.
This is not a soft deadline. Companies that miss December 31, 2026 commissioning lose GITA eligibility entirely for that system — the allowance cannot be backdated or retrospectively claimed.
Timeline: Can You Still Make the Deadline?
Today is March 5, 2026. You have approximately 10 months — which sounds comfortable, but the MIDA approval process, TNB grid connection, and construction timeline eat into this fast.
| Activity | Typical Duration | Cumulative Timeline |
|---|---|---|
| Trexon site assessment and quotation | 5–10 days | Week 2 |
| MIDA GITA application and LOA | 4–6 weeks | Week 8 |
| TNB approval and grid study | 4–8 weeks | Week 16 |
| Installation and commissioning | 3–6 weeks | Week 22 |
| Latest safe start date | — | July 31, 2026 |
If you begin your site assessment in March 2026, you have comfortable margin. If you wait until August, you are risking the December 31 deadline. Do not gamble with a RM 60,000–240,000 tax benefit.
Ready to secure your GITA before it expires? Get your factory solar assessment from Trexon today. We handle the MIDA documentation as part of our commercial installation package.