GITA 60% Tax Allowance 2026: The Dec 31 Deadline Every Malaysian Manufacturer Must Know
⏰ GITA 2026 Deadline: December 31, 2026 — Only 9 months remaining.
Solar systems must be installed and commissioned before this date to qualify. MIDA application must be submitted before installation begins.
Key Takeaways
- • GITA (Green Investment Tax Allowance) gives manufacturers a 60% tax allowance on qualifying solar capex — set off against income tax over 5 years.
- • A factory spending RM500,000 on solar can reduce its tax liability by RM300,000 over 5 years.
- • The GITA deadline for solar is December 31, 2026 — installations must be commissioned before this date.
- • GITA is approved by MIDA (Malaysian Investment Development Authority), NOT LHDN — your tax agent submits claims separately.
- • Trexon handles all GITA documentation: MIDA letters, PE-endorsed drawings, commissioning reports (IEC 62446).
If you own or manage a factory, warehouse, or commercial premises in Malaysia, there is a government incentive worth hundreds of thousands of ringgit sitting on the table — and it expires on December 31, 2026. It is called the Green Investment Tax Allowance (GITA), and most business owners have never heard of it.
This article breaks down exactly what GITA is, who qualifies, how to calculate your savings, and what you need to do before the year-end deadline.
1. What Is GITA? (Simple Explanation)
GITA stands for Green Investment Tax Allowance. Under Malaysia's Income Tax Act 1967 (Schedule 7A), companies investing in qualifying green technology assets — including solar PV systems — receive a 60% tax allowance on the qualifying capital expenditure.
This allowance is set off against 70% of your company's statutory income each year over 5 years, until the full 60% is utilized. In plain terms: a big chunk of your solar investment reduces the income that gets taxed, for five consecutive years.
Unlike a rebate or grant, GITA does not give you cash back. Instead, it shields a portion of your income from corporate tax — which for most manufacturers is 17% (SME) to 24% (large company). When you run the numbers, the effective savings are substantial.
2. GITA Calculation — Real Numbers
Example: RM500,000 Factory Solar System
| Item | Value |
|---|---|
| Solar System Cost | RM 500,000 |
| GITA Allowance (60%) | RM 300,000 |
| Applied against income tax over 5 years | RM 60,000 / year |
| Actual tax saved per year (17% SME rate) | RM 10,200 / year |
| Actual tax saved per year (24% large co.) | RM 14,400 / year |
| Total tax savings over 5 years | RM 51,000 – RM 72,000 |
| Net effective cost of solar system | RM 428,000 – RM 449,000 |
* This is tax allowance, not a direct grant. Actual savings depend on your company's taxable income and applicable tax rate. Consult your tax agent for precise calculations.
Scaled Comparison: 3 Factory Sizes
GITA Savings by System Size
| System Size | Capex | GITA Allowance | Tax Saved (24%) |
|---|---|---|---|
| Small Factory (~70kWp) | RM 200,000 | RM 120,000 | RM 28,800 |
| Medium Factory (~170kWp) | RM 500,000 | RM 300,000 | RM 72,000 |
| Large Factory (~400kWp) | RM 1,200,000 | RM 720,000 | RM 172,800 |
3. Who Qualifies for GITA?
To be eligible for the Green Investment Tax Allowance on solar, your company must meet all of the following criteria:
- Malaysian-incorporated company — must be a Sdn Bhd or Bhd (not sole proprietorship or partnership).
- Own business premises — the solar system must be installed on your factory solar installation, warehouse, or office. You cannot claim GITA for a rented building (though a long-term tenancy agreement with landlord consent may be considered).
- Commissioned before December 31, 2026 — the system must be fully operational. Partial completion does not qualify.
- MIDA application submitted before installation begins — you cannot retroactively apply. The MIDA approval letter must come first.
- SEDA-registered installer — the solar contractor must be a registered PV Service Provider (RPVSP) under SEDA Malaysia. Trexon Energy is fully registered and compliant.
- System meets IEC standards — equipment must comply with IEC 61215, IEC 61730 (modules) and IEC 62109 (inverters). All Trexon-supplied equipment is IEC-certified.
Minimum system size: There is no official minimum, but GITA is economically meaningful for systems of 50kWp and above (approximately RM150,000 in capex). Below this threshold, the administration effort may not justify the tax savings. See our industrial solar systems page for typical sizing for manufacturing plants.
4. GITA vs Normal Capital Allowance — Why GITA Wins
Tax Treatment Comparison: RM500,000 Solar Investment
| Factor | GITA (Green) | Normal Capital Allowance |
|---|---|---|
| Allowance rate | 60% of capex | 3% per year (Initial + Annual) |
| Total years to full claim | 5 years | ~33 years |
| Allowable deduction (Year 1) | RM 60,000 | RM 15,000 (initial 20% + 3%) |
| Total allowable deduction (5 years) | RM 300,000 | RM 75,000 |
| Tax saved over 5 years (24% rate) | RM 72,000 | RM 18,000 |
GITA delivers 4x more tax relief than normal capital allowance in the same 5-year window — and you do not need to wait 33 years to fully utilize the deduction.
5. How to Apply for GITA — Step by Step
Step 1: Get a GITA-Ready Quotation from Trexon
MIDA requires a specific format for the project quotation. A standard commercial quotation is not sufficient. Trexon prepares MIDA-formatted proposals that include the correct itemized breakdown, equipment specifications (make, model, IEC certification), and technical parameters that MIDA reviewers require.
Step 2: Submit GITA Application to MIDA Before Installation
The application is submitted to MIDA (Malaysian Investment Development Authority) — not LHDN. This is a common misconception. LHDN processes your annual tax return, but the GITA approval comes from MIDA first. You must submit and receive approval before your installation commences. Retroactive applications are not accepted.
Step 3: Receive MIDA Approval Letter
MIDA typically reviews and issues approval within 4 to 8 weeks. The approval letter is the key document that your tax agent will use to claim the allowance annually. Keep this letter in your company records permanently.
Step 4: Trexon Completes the Installation
Once MIDA approval is received, Trexon schedules and completes the installation. Upon commissioning, we provide the IEC 62446 Commissioning Report, which is the technical certificate confirming the system is operational and compliant. This is a MIDA documentation requirement.
Step 5: Annual GITA Claims via Your Tax Agent
Each year for 5 years, your tax agent submits the GITA capital allowance claim in your company's income tax return. The 60% allowance is applied against 70% of your statutory income annually until the full amount is utilized. No further action is needed from MIDA after the initial approval.
6. Why December 31, 2026 Is a Hard Deadline
The current GITA incentive for solar and green technology assets was extended in Budget 2024 through December 31, 2026. This was a deliberate government policy to accelerate green investment before the deadline.
After December 31, 2026, the incentive may not be renewed, or may be reduced in scope. Historically, previous green incentive windows (like GITE — Green Income Tax Exemption) were either discontinued or significantly narrowed after their expiry.
Factories that miss this window do not simply get a smaller incentive — they lose the 60% allowance entirely and fall back to the standard capital allowance track (3% per year). For a RM1.2M system, that is the difference between RM172,800 in tax savings over 5 years versus RM43,200. A potential RM129,600 loss — simply by delaying.
Timeline Reality Check
MIDA approval takes 4–8 weeks. Installation takes 4–8 weeks for large systems. Allow time for grid approval from TNB (2–6 weeks). Start your GITA process by September 2026 at the latest to guarantee commissioning before December 31.
7. Trexon's GITA Documentation Package
Most solar installers provide a system and walk away. Trexon Energy provides the complete GITA documentation package required for a successful MIDA application and annual tax claims:
- MIDA-Formatted Quotation — correct item codes, equipment specs, and project scope in MIDA-required format.
- PE-Endorsed Single-Line Diagrams — Professional Engineer-endorsed electrical drawings (required by MIDA and Suruhanjaya Tenaga).
- SEDA RPVSP Certification Letter — confirming Trexon is a registered PV Service Provider under the Sustainable Energy Development Authority.
- IEC 62446 Commissioning Report — post-installation technical certificate confirming system performance and compliance.
- Tax Agent Liaison — Trexon's documentation team liaises directly with your company's tax agent to ensure all annual claims are filed correctly.
Our B2B clients typically reduce total GITA application time from 3–4 months (self-managed) to under 6 weeks when Trexon manages the documentation workflow.
Calculate Your GITA Tax Savings
Our B2B team will calculate the exact GITA allowance for your factory size and walk you through the full ROI — including MD charge reduction, GITA savings, and depreciation benefits.