Tax Incentives in Malaysia

Tax Incentives in Malaysia

Unlock Business Growth with Smart Tax Planning

Malaysia offers a wide range of tax incentives to support the growth of small, medium, large, and multinational companies. These incentives differ across industries and are updated regularly through the Government’s annual Budget.

Key Tax Incentives Available in Malaysia

1. Pioneer Status

Companies involved in promoted activities or manufacturing promoted products may qualify for Pioneer Status, which grants:

• Partial tax exemption for 5 to 10 years

• Only 30% of statutory income is taxed; the remaining 70% is exempt

• Starts from the company’s Production Day

• Unused capital allowances and business losses can be carried forward after the exemption period

Ideal for startups and companies entering key growth sectors.

2. Investment Tax Allowance (ITA)

An alternative to Pioneer Status, ITA is ideal for companies with large capital investments:

• 60% allowance on qualifying capital expenditure (machinery, plant, factory, etc.)

• Deductible against 70% of statutory income

• Unused allowance can be carried forward

• Remaining 30% of income taxed at standard corporate tax rates

Best suited for asset-heavy and technology-driven projects.

3. Reinvestment Allowance (RA)

This incentive supports companies that are expanding, modernizing, or diversifying:

• Available to businesses in operation for at least 3 years

• 60% allowance on qualifying capital expenditure (QCE)

• Offset against 70% of statutory income

• Incentive period: up to 15 years

• No 70% cap for projects with high productivity levels (as defined by MOF)

Perfect for manufacturing or agriculture businesses investing in future growth.

4. Export Incentives (Allowance for Increased Exports)

Encourages companies to grow internationally:

• For resident companies in manufacturing, agriculture, or services

• Incentives range from 10% to 100% based on increased export value

• Deductible against up to 70% of statutory income

Supports companies expanding into global markets.

‍ How We Can Help You

As licensed Tax Agents under Section 153(3) of the Income Tax Act 1967, we provide expert guidance on selecting and maximizing the right tax incentives for your business.

Our Services Include:

• Strategic tax planning and compliance

• Identification and application of tax incentives best suited for your industry

• Preparation and timely submission of tax forms

• Accurate tax computation and relief optimization

• Liaison with Inland Revenue Board (IRB) for appeals, reassessments, and disputes

• GST services – from registration to filing with Royal Malaysian Customs

Whether you're a growing SME or a large enterprise, we simplify your tax strategy so you can focus on building your business.