2024/2025 Malaysian Tax Booklet

Incentives

Years

Main incentives

Company producing promoted products or engaged in promoted activities

PS with tax exemption of 70% of SI;

or

ITA of 60% on qualifying expenditure (QE) set-off against 70% of SI

5

Allowance for increased exports (AIE)

For prescribed agricultural produce

Allowance equal to 10% of the value of increased exports deducted against 70% of SI

Enhanced AIE

Company attaining / receiving*:

Rates of allowance, deductible up to 70% of SI:

• Significant increase in export of at least 50%

30% of the value of increased exports

• Penetration of new markets

50% of the value of increased exports

• *Export Excellence Award

100% of the value of increased exports

Reinvestment

Company undertaking qualifying project in expansion, modernisation or diversification of its cultivation and farming business excluding the business of rearing chicken and ducks

Reinvestment Allowance of 60% of QE set-off against 70% of SI 

15

Accelerated capital allowance of 100% of QE; and

Income tax exemption of 100% on QE

PS with tax exemption of 70% of SI;

or

ITA of 60% on QE set-off against 70% of SI

Company investing in a subsidiary company which undertakes new food production project*

Tax deduction up to 3 consecutive YAs equivalent to the amount of investment made

Company undertaking food production project * :

- New project

- Expansion project for existing company

Income tax exemption of 100% of SI

Income tax exemption of 100% of SI

10

5

Incentives

Years

New manufacturing projects, and expansion and / or diversification projects for:

• Assembly of Energy Efficient Vehicles (EEV)
• Assembly of Next Generation Vehicle (NxGV)
• Critical components / systems for EEV and non-EEV
• Components for hybrid and electric vehicles
• Components for NxGV

Income tax exemption;

or

Income tax exemption equivalent to ITA
(Applications received by 31.12.2025)

Investment in manufacturing of electric vehicle charging equipment

(Applications received by 31.12.2025)

Income tax exemption of 100% of SI from YA 2023 to YA 2032;

or

ITA of 100% on QE set-off against 100% of SI

5

Rental of non-commercial electric vehicles

Tax deduction on rentals incurred from YA 2023 to YA 2027 (capped at RM300,000)

Incentives

Years

New companies (providing cold room facilities for prescribed perishable agriculture produce)

PS with tax exemption of 70% of SI;

or

ITA of 60% on QE set-off against 70% of SI

Existing companies (reinvesting in cold room facilities for prescribed perishable agriculture produce)

PS with tax exemption of 70% of increased SI;

or

ITA of 60% on additional QE set-off against 70% of SI

5

Incentives

Years

The following are three-tier package incentives for approved companies in Medini:

• Approved developer

-

• Approved development manager

Income tax exemption of SI derived from the provision of management, supervisory or marketing services to approved developers until YA 2024 (Applications received by 31.12.2024)

-

• IDR status company (Applications and commencement of qualifying activities by 31.12.2024)

ITA of 100% of QE set-off against 100% of SI

Non-resident

Withholding tax exemption on royalty and technical fee received from IDR status company 

^{* from the date of commencement of qualifying activity} 

10*

Income tax at 15% on chargeable income from employment with a designated company engaged in qualified activities

-

Northern Corridor Economic Region(NCER) 
Investments in priority sectors of NCER may qualify for the following broad-based incentives as well as customised incentives:

1. Income tax exemption up to 100% for a period up to 15 years
2. ITA up to 100% on QE for a period up to 10 years
3. Import duty exemption on raw materials, components, machinery, spare parts and equipment
4. Stamp duty reduction of 50% on instruments of transfer or lease of land (Kedah only)

East Coast Economic Region (ECER)
(Applications received by 31.12.2024)

Qualifying person undertaking qualifying activity

Income tax exemption of SI; or

10

Income tax exemption equivalent to 100% of QE

5

Stamp duty exemption on instruments of transfer of real property or lease of land or building used for the purpose of carrying on a qualifying activity (executed by 31.12.2024)

-

Qualifying person undertaking special qualifying activity 

Income tax exemption of 70% to 100% of SI and for a period as determined by the MoF; or

Income tax exemption equivalent to 60% to 100% of QE incurred and within a period as determined by the MoF

-

Approved developer undertaking development in industrial park or free zone

Income tax exemption of SI derived from:

• disposal of any right over any land or disposal of a building or rights over building or part of building; or

• rental of building or part of building

10

Approved park managers

Income tax exemption of SI derived from the provision of park management services in the industrial park or free zone

10

Approved development manager

Income tax exemption of SI derived from the provision of management, supervisory or marketing services relating to the development of an industrial park or free zone

10

Company investing in a related company

Single deduction equivalent to the value of investment made into a related company carrying out qualifying activity or special qualifying activity

-

Company or individual who sponsors any hallmark event carried on in ECER

A deduction against business income of an amount not exceeding RM1 million per YA in respect of contribution in cash or in kind

Sarawak Corridor of Renewable Energy (SCORE)

Investors who make strategic investments in SCORE can apply for customised special incentive packages.

Sabah Development Corridor (SDC)

(Applications received by 31.12.2024)

Income tax exemption of SI equivalent to 100% QE incurred for sectors of:

• Hotel and resort, creative, manufacturing (specified downstream sectors), education hub, marine (downstream), and shipping.

• Production of Halal products.

5

10

Income tax exemption of SI for sectors of:

• Creative and shipping.

• Hotel and resort, manufacturing (specified downstream sectors), education hub, and marine (downstream).

5

10

Stamp duty exemption on instruments executed by 31.12.2024

Johor-Singapore Special Economic Zone

Incentives

• Tax exemption on all income if at least 90% of total income is distributed and the REIT / PTF is listed on Bursa Malaysia

• Special single deduction for consultancy, legal and valuation service fees incurred in the establishment of REIT / PTF

• Final withholding tax on income distribution from a REIT which has been exempted from tax received by:

  • non-corporate or foreign institutional investors - 10% (until YA 2025)

  • non-resident companies - 24% 

• Transfer of real property to REIT

  • Stamp duty exemption on instruments of transfer / deed of assignment relating to the purchase of real property and instruments of transfer of real property to REIT / PTF

  • Real property gains tax exemption on disposal of real property to a REIT / PTF

  • No balancing charge on disposal of an industrial building from a company to a REIT. The REIT is eligible to claim the balance of unclaimed IBA of the disposer if the disposer company owns 50% or more of the units in the REIT

Unit Trust

Tax exemption on interest income from any licensed bank / development financial institution except in the case of a unit trust which is a wholesale fund which is a money market fund. 

Tax exemption on gains on realisation of investments in real property

Tax exemption on certain interest or discount – Refer to the chapter on “Income exempt from tax”

Closed-end fund company

Tax exemption on gains on realisation of investments

Tax exemption on certain interest or discount – Refer to the chapter on “Income exempt from tax”

Fund management

Tax exemption on SI derived from the business of providing fund management services in respect of (until YA 2027):

1. At 60% of SI for funds managed in accordance with Syariah principles and certified by Securities Commission (SC) to the following investors:

   • local investors in Malaysia and foreign investors;

   • Business Trust and REIT in Malaysia.

2. Sustainable and Responsible Investments (SRI) fund approved by the SC

Islamic Finance

Issuance of Sukuk and Retail Sukuk under principles of Wakalah

• Deduction on expenses for the issuance of Sukuk.

• Deduction on expenses and double deduction on additional expenses for the issuance of Retail Sukuk 

(until YA 2025)

Issuance cost of SRI Sukuk

Tax deduction is given on the issuance costs of SRI Sukuk approved, authorised by or lodged with the SC (until YA 2027)

Company that establishes a SPC solely for the purpose of issuance of Islamic securities

Single deduction for cost of issuance of Islamic securities incurred by a Special Purpose Company (SPC)

Incentives

Years

GITA Project (Business purposes)

(Applications received from 1.1.2024 until 31.12.2026)

ITA of 100% on QE set-off against 70% / 100% of SI

5+5

5

GITA Asset (Own consumption)

(GITA assets purchased from 1.1.2024 until 31.12.2026)

• Tier 1 (Qualifying assets approved by MOF, Battery energy storage system, Green building)

• Tier 2 (Qualifying assets approved by MOF, Renewable energy system, Energy efficiency

Company undertaking solar leasing activities

(Application period extended to 31.12.2026)

Income tax exemption of 70% of SI

• Capacity of >3MW - ≤10MW

Development of carbon projects registered with an international standards body recognised by Bursa Malaysia (Applications received from 1.1.2024 until 31.12.2026)

Smart Artificial Intelligence (AI)-Driven Reverse Vending Machine

Contributions / sponsorships of smart vending machines which utilise smart AI

Tax deduction for the contributions or sponsorships made from 1.4.2023 to 31.12.2024 extended to  31.12.2026) and applications received in the same period

Incentives

Years

Mines Wellness City (MWC)

MWC developer (undertaking new development in MWC)

^{Note 1 - From the first YA the MWC developer derives SI until YA 2026}

Income tax exemption of 100% of SI from rental of a building or part of a building located in MWC

Note 1

MWC operator

PS with tax exemption of 70% of SI derived from qualifying activities carried out in the MWC;

or

ITA of 60% on QE set-off against 70% of SI for each YA. 

(Applications received by 31.12.2026)

5

5

Professional services

Export of medical and dental services

Further deduction of QE incurred for the purpose of the export of services /  professional services

-

Charitable hospitals registered as Company Limited by Guarantee

Incentives

Years

Non-resident person who receives income from a Malaysian shipping company

Withholding tax exemption on income from:

• rental of a ship on a voyage, time charter or bare boat basis; or
• rental of International Standard Organisation containers

-

Company undertaking or intending to expand / diversify into  integrated logistics service

Income tax exemption of 70% of SI,

or

ITA of 60% on QE set-off against 70% of SI

5

Company engaged in SLC activities with adoption of IR4.0 elements
(Application received from 1.1.2025 to 31.12.2027)

Ship building and repairing

(Applications received by 31.12.2027)

New company

PS with tax exemption of 70% of SI, or

ITA of 60% of QE set-off against 70% of SI

5

Existing company

ITA of 60% of additional QE set-off against 70% of SI

5

• Double deduction for multinational enterprise (MNE) expenditure of up to RM2 million per year
• Tax deduction of amount invested by MNEs or their suppliers investing in joint ventures with other local suppliers
• A tax incentive package based on performance will be given to local suppliers

New investment

0% reduced tax rate (RTR) on qualifying IP income and 5% or 10% RTR on qualifying non-IP income; or

up to 10

ITA of 60% or 100% on QE set-off against 100% of SI

5

Expansion

15% RTR on qualifying IP and non-IP income; or

5

Owner of a building in Cyberjaya Flagship Zone used for his business or rented to an approved MD status company

IBA at 10% of the qualifying building expenditure incurred for approved activities

10

Incentives

Years

Chargeable person carrying out petroleum operations in qualifying project

Investment Allowance of 60% of QE set-off against 70% of SI in respect of a qualifying project or infrastructure asset as determined by the Minister

10

Labuan International Commodity Trading Company which  undertakes qualifying activity under the Global Incentives for Trading programme 

Tax exemption on income derived purely from the trading of physical and related derivatives instruments of liquefied natural gas (LNG) 

3

1. petroleum and petroleum-related products including LNG,
2. minerals,
3. agriculture products,
4. refined raw materials,
5. chemicals, 
6. base minerals,
7. coal

Petroleum income tax rate at 25%

Carry back of losses from decommissioning activities to be utilised against income for 2 consecutive immediate preceding YAs

Exemption from export duty on petroleum products

Pengerang Integrated Petroleum Complex (PIPC)

(Applications received by 31.12.2028)

• Income tax rate of 5% / 10% on income from qualifying activities, or

• ITA of 100% / 60% set-off against 100% of SI

Stamp duty exemption on the following instruments executed in relation to the development of qualifying project/activity:

- Transfer of land or building; or

- Rental/lease of land or building.

Incentives

Years

Brand name, quality and accreditation

Further deduction for advertising expenditure and professional fees incurred to promote / advertise Malaysian brand names 

Double deduction for cost of obtaining quality system and standards certification

Single deduction for cost of obtaining accreditation for a laboratory or as a certification body

Further deduction of QE for the purpose of export of services / professional services

Further deduction for the remuneration paid to an employee who is physically or mentally handicapped

Further deduction on expenditure incurred for the provision and maintenance of childcare centre for the benefit of their employees or childcare allowance given to their employees

Further deduction for employers hiring workers affected by accidents or critical illnesses and certified by SOCSO to be fit to work

Further deduction for the employment of senior citizens (60 years and above) or ex-convicts, inmates / ex-inmates of Henry Gurney School under the Malaysian Prison Department, and protection and rehabilitation institutions and care centres under the Social Welfare Department, with a monthly remuneration up to RM4,000 (until YA 2025)

50% further deduction for the following:

• Additional paid leave up to 12 months provided to employees caring for children, ill or disabled family members
• One-off claim capped at RM500,000 for expenses on capacity building and software acquisition for implementing flexible work arrangements.
• Employment expenses paid for a period of 12 months for hiring women returning to work

Applications received by Talent Corporation Malaysia Berhad from 1.1.2025 until 31.12.2027

Single deduction for approved expenditure incurred on environmental preservation and conservation projects, or for maintenance of heritage building certified under the National Heritage Act 2005

Tax deduction up to RM50,000 for each YA on the following expenditure incurred on Environmental, Social and Governance (ESG) related expenditure (w.e.f YA 2024 until YA 2027):

• Enhance Sustainability Reporting Framework

• Climate Risk Management and Scenario Analysis

• LHDN Tax Corporate Governance Framework

• Transfer Pricing Documentation

• E-invoicing implementation for MSMEs

• Any ESG reporting by companies to an approved regulator by MoF

Tax deduction up to 10% of aggregate income for contributions made to the Tabung Komuniti Filem dan Pembangunan Filem Kenegaraan under FINAS.

Tax deduction up to 10% of aggregate income, for contribution to nonprofit-based organisations involved in the development of sport at grassroot levels.