Executive Summary
GITA allows qualifying Malaysian manufacturers to offset 60% of their solar PV capex against 70% of statutory income, reducing the effective corporate tax payable. For an RM800,000 system, this produces RM480,000 in allowance, translating to RM115,200 in real cash tax savings at the 24% corporate rate. The allowance carries forward indefinitely until fully absorbed. The current framework expires December 31, 2026.
01What is GITA and How Does it Work?
The Green Investment Tax Allowance (GITA) is an investment tax allowance administered by MIDA (Malaysian Investment Development Authority) under the Income Tax Act 1967. 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 must be NEM/SELCO-registered with SEDA |
| 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 | MIDA application submitted by December 31, 2026 | Commission system by Sept 2026 to allow filing time |
| 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 already commissioned pre-application
- Imported equipment not on MyHIJAU list
03GITA Impact Calculator: RM800K System
Below is a worked example for a 500kWp rooftop solar installation at an industrial facility in Selangor. Total system cost: RM800,000.
| Scenario | Without GITA | With GITA | GITA Benefit |
|---|---|---|---|
| Solar System Cost (capex) | 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% |
| Simple Payback Period | 4.8 years | 3.9 years | ↓ 0.9 years |
| 10-Year Net Cash Benefit (energy savings) | RM 1.24M | RM 1.36M | ↑ RM 115,200 |
GITA Savings at Different System Sizes
| System Size | Est. Capex | GITA (60%) | Tax Saved (24%) |
|---|---|---|---|
| 100 kWp | RM 160,000 | RM 96,000 | RM 23,040 |
| 200 kWp | RM 300,000 | RM 180,000 | RM 43,200 |
| 500 kWp | RM 800,000 | RM 480,000 | RM 115,200 |
| 1 MWp | RM 1,500,000 | RM 900,000 | RM 216,000 |
| 2 MWp | RM 2,800,000 | RM 1,680,000 | RM 403,200 |
| 5 MWp | RM 6,500,000 | RM 3,900,000 | RM 936,000 |
* Capex estimates based on Q1 2026 Malaysian market rates. Actual figures may vary. Tax savings assume full absorption in one year of assessment.
04Combining GITA with Green Bank Loans: 2.5–3.5 Year Payback
The most financially optimal structure layers the GITA tax allowance on top of green financing. Under the MGTC Green Technology Financing Scheme (GTFS), participating banks offer loans at an effective 3.5–4.5% per annum (after the government's 2% interest rebate). When combined with GITA, the effective all-in payback period compresses dramatically.
Financial Stack: RM800K System
05MIDA 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-licensed contractor)
- SEDA RPVSP application submitted (NEM or SELCO)
- TNB application for interconnection approval
- Physical installation and commissioning by certified engineers
- TNB metering inspection and certificate issuance
MGTC Green Technology Verification
- Apply to MGTC for Green Technology Verification (GTV) certificate
- Submit system specifications, commissioning report, energy production data
- MGTC site inspection (may be required for systems >500 kWp)
- GTV certificate issued (typically 2–4 weeks)
MIDA Application Submission
- Compile full MIDA application package (see document checklist below)
- Submit via MIDA InvestMalaysia portal (online submission)
- MIDA officer review: 4–8 weeks processing time
- MIDA approval letter issued — retain for LHDN filing
LHDN Tax Claim Filing
- Attach MIDA approval letter to Form C (corporate tax return)
- Complete Schedule 7A with ITA calculation
- Tax advisor files allowance claim against statutory income
- LHDN acknowledges; tax refund or reduced assessment issued
06MIDA Document Checklist
07Critical Timeline: Why Act Now
| Milestone | Latest Date | Consequence of Missing |
|---|---|---|
| Contract with EPC Contractor | By Sep 30, 2026 | Insufficient time for commissioning before Dec 31 |
| SEDA Application Submitted | By Oct 15, 2026 | SEDA approval takes 4–6 weeks; 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 |
| MIDA Application Submitted | By Dec 31, 2026 | GITA benefit lost entirely; no extension expected |
| 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 high-yield financial asset. When you layer the 60% GITA allowance on top of RM97.06/kW MD charge savings, your post-tax IRR often exceeds 35%. There is no other asset class in Malaysia today with this level of guaranteed sovereign subsidy — and this window closes December 31, 2026.”
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 MIDA require for the GITA application?
Will GITA be extended beyond December 31, 2026?
Official Resources
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