Executive Summary
GITA (Asset) lets the company that owns a qualifying solar PV system claim an allowance of 60% of qualifying capex, set off against up to 70% of statutory income. It is an allowance, not a rebate or deduction. To qualify, the capex must be incurred, the system commissioned and the MGTC application submitted by 31 December 2026. Illustration only: RM800,000 of qualifying capex produces a RM480,000 allowance, worth RM115,200 of tax at an assumed 24% rate if the company has enough statutory income to absorb it.
01What is GITA and How Does it Work?
The Green Investment Tax Allowance (GITA) is an investment tax allowance under the Income Tax Act 1967; applications for green technology assets go to MGTC (Malaysian Green Technology and Climate Change Corporation). It was introduced to accelerate private-sector adoption of green technology assets, including solar photovoltaic systems, by substantially reducing the post-tax cost of capital expenditure.
Unlike a tax deduction (which reduces taxable income by the expense amount), a tax allowance under GITA operates as an Investment Tax Allowance (ITA) — a more powerful mechanism where 60% of the qualifying capex is converted into a direct offset against statutory income.
GITA Mechanics Explained
Important distinction: GITA is not a grant or rebate. It is a tax allowance — it reduces the corporate income tax you owe, not the purchase price of the system. To benefit, your company must be profitable (have statutory income). Loss-making companies can still claim it but the benefit only crystallizes in future profitable years.
02Eligibility Criteria
GITA has specific eligibility requirements that must all be satisfied for a valid claim. Failure on any single criterion will result in a rejected application.
| Criterion | Requirement | How to Satisfy |
|---|---|---|
| Company Incorporation | Must be incorporated under Companies Act 2016, resident in Malaysia | SSM registration certificate required |
| Asset Type | Solar PV system (panels, inverters, mounting, wiring) | System registered with SEDA (Solar ATAP or SELCO) |
| MyHIJAU Certification | All major equipment (panels, inverters) must appear in MyHIJAU directory | Verify with supplier before procurement |
| Own Consumption | System must primarily serve your own facility's energy needs | SEDA commissioning under your company name |
| Application Deadline | Capex incurred, system commissioned and MGTC application submitted by 31 December 2026 | Plan installation and paperwork backwards from 31 December 2026 |
| GTV Verification | Green Technology Verification certificate from MGTC | Apply to MGTC post-commissioning (2-4 weeks) |
- Manufacturing companies (all sectors)
- Trading and service companies
- SMEs (no minimum turnover)
- Holding companies (own-use assets)
- GLCs and foreign-owned companies
- Sole proprietors and partnerships
- OPEX/PPA solar (no ownership transfer)
- Maintenance and service costs
- Systems commissioned, or applications submitted, after 31 December 2026
- Imported equipment not on MyHIJAU list
03GITA Impact Calculator: RM800K System
Illustration only, with assumed figures — not a quote: RM800,000 of qualifying capex, RM2,000,000 of statutory income and a 24% tax rate. Trexon prices every system per project from your bills.
| Scenario | Without GITA | With GITA | GITA Benefit |
|---|---|---|---|
| Qualifying Capex (assumed) | RM 800,000 | RM 800,000 | — |
| Corporate Tax Payable (24% on RM2M) | RM 480,000 | RM 364,800 | ↓ RM 115,200 |
| Effective Net System Cost | RM 800,000 | RM 684,800 | ↓ 14.4% |
GITA at Different Capex Levels (Illustration)
| Assumed Capex | GITA (60%) | Tax Saved (24%) |
|---|---|---|
| RM 160,000 | RM 96,000 | RM 23,040 |
| RM 300,000 | RM 180,000 | RM 43,200 |
| RM 800,000 | RM 480,000 | RM 115,200 |
| RM 1,500,000 | RM 900,000 | RM 216,000 |
| RM 2,800,000 | RM 1,680,000 | RM 403,200 |
| RM 6,500,000 | RM 3,900,000 | RM 936,000 |
* Illustration only. Capex values are assumptions, not Trexon prices — every system is priced per project from your bills. Assumes a 24% tax rate and enough statutory income to absorb the allowance within the 70% cap.
04Combining GITA with Green Bank Loans
The most financially optimal structure layers the GITA tax allowance on top of green financing. Under the Green Technology Financing Scheme (GTFS), participating banks set their own rates and terms. A company that owns a loan-financed system can still claim GITA on the full qualifying capex, not just its equity.
Illustration: RM800K Capex, Loan-Financed (assumed figures)
05MGTC Application Process: Step-by-Step
Pre-Procurement Checklist
- Confirm company eligibility (Malaysian-incorporated, profitable)
- Verify all target equipment appears in MyHIJAU directory
- Request Trexon Energy to prepare your GITA-ready proposal
- Engage your tax advisor to confirm GITA strategy and income position
SEDA Registration & Installation
- Execute EPC contract with Trexon Energy (SEDA-registered contractor)
- Solar ATAP (or SELCO) application submitted via SEDA
- TNB application for interconnection approval
- Physical installation and commissioning by our installation team
- TNB metering inspection and certificate issuance
MGTC GITA (Asset) Application
- Compile the application package (see document checklist below)
- Submit the GITA (Asset) application to MGTC by 31 December 2026
- Capex must be incurred and the system commissioned by the same date
- Keep all MGTC correspondence for your tax filing
Tax Return Filing
- Your tax adviser claims the allowance in the company tax return, following the MGTC outcome
- Set-off is limited to 70% of statutory income per year of assessment
- Any unabsorbed allowance carries forward under the incentive rules
06Application Document Checklist
07Critical Timeline: Why Act Now
| Milestone | Latest Date | Consequence of Missing |
|---|---|---|
| Contract with EPC Contractor | As early as possible | Less time to commission before 31 Dec |
| SEDA Application Submitted | By Oct 15, 2026 | SEDA has up to 2 months to notify the result; risks missing commissioning |
| TNB Interconnection Approval | By Nov 15, 2026 | TNB processing: 2–4 weeks; physical metering takes additional 2 weeks |
| System Commissioning | By Dec 15, 2026 | System must be live before Dec 31 to qualify for GITA |
| MGTC Application Submitted | By Dec 31, 2026 | GITA benefit lost entirely; no extension announced |
| LHDN Form C Filing | Per YA2026 deadline | Tax savings deferred to YA2027 (cash flow impact) |
“Most CFOs view solar as a utility expense. I view it as a financial asset. GITA improves the after-tax economics for companies that own their system — but only if the capex is incurred, the system commissioned and the MGTC application submitted by 31 December 2026. Model it from your own bills and tax position.”
08Frequently Asked Questions
Is solar system maintenance cost eligible for GITA?
Can SMEs (Small and Medium Enterprises) apply for GITA solar?
Does GITA apply to leased or OPEX-model solar systems?
What is the exact GITA application deadline for 2026?
Can GITA be combined with green bank loans (GTFS)?
What documents does the MGTC GITA application require?
Will GITA be extended beyond December 31, 2026?
Official Resources
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