Green Investment Tax Allowance (GITA): Asset vs Project and How to Apply

The Green Investment Tax Allowance in Malaysia lets a company deduct 60% or 100% of qualifying capital expenditure on approved green technology from its statutory income, for expenditure incurred between 1 January 2024 and 31 December 2026. Two agencies run the scheme: the Malaysian Green Technology and Climate Change Corporation (MGTC) handles asset-based claims, and the Malaysian Investment Development Authority (MIDA) handles project-based claims.¹

Asset or Project: Pick One Stream

GITA has two tracks, and a company (together with its related companies) cannot claim both within the same incentive period. The choice depends on why you are buying the green technology.¹

GITA Asset is for equipment you buy for your own operations: solar on your factory roof, electric forklifts in your warehouse, a battery energy storage system for your plant. The equipment must be new and listed in the MyHIJAU Directory.

GITA Project is for commercial green ventures: running an EV charging network, operating a green hydrogen facility, generating renewable energy for sale. Here the green technology is the business, not a support asset for another business.

What Qualifies Under GITA Asset

MGTC divides qualifying assets into two tiers with different deduction rates. Whichever tier your equipment falls into, the allowance can only reduce up to 70% of your statutory income in any single year of assessment.²

Tier 1 (100% Allowance)

Tier 1 gives you a full 100% allowance on qualifying capital expenditure. It covers:

Electric vehicles for commercial and industrial use only: electric motorcycles, buses, panel vans, forklifts, terminal tractors, and light or heavy-duty trucks.
EV infrastructure: charging systems and battery swapping stations.
Green buildings, based on a Green Cost Certificate from an approved certification body.
Battery energy storage systems (BESS).

Spend RM500,000 on qualifying EV charging equipment and the full RM500,000 counts toward the deduction, subject to the 70% statutory income cap each year.¹

Tier 2 (60% Allowance)

Tier 2 gives you 60% of the capital expenditure as the allowance. The categories are broader:¹

Energy efficiency equipment: high-efficiency transformers, chillers, cooling towers, air compressors, industrial air filtration with energy-efficient motors, heat recovery systems, boilers, and thermal energy storage.
Renewable energy systems for your own consumption: solar, biomass, biogas, mini hydro, geothermal, and wind.
Waste management: composters and waste recycling systems.
Water management: wastewater recycling and rainwater harvesting.

If the item you want isn’t already in the MyHIJAU Directory, the manufacturer or supplier needs to register for MyHIJAU Mark recognition before you apply.

What Qualifies Under GITA Project

MIDA organizes project claims into three tiers, each with its own allowance rate, statutory income offset, and incentive period.³

Tier 1, Green Hydrogen: 100% allowance, offset against 100% of statutory income, incentive period up to 10 years (an initial 5 years plus a possible 5-year extension).
Tier 2, Integrated Waste Management and EV Charging Stations: 100% allowance, offset against 100% of statutory income, 5-year incentive period.
Tier 3, Renewable Energy Generation: 100% allowance, offset against 70% of statutory income, 5-year incentive period. Qualifying sources: biomass, biogas, mini hydro, geothermal, solar, and wind.

The gap between Tier 2 and Tier 3 matters more than it looks. An EV charging network operator absorbs the allowance against all of its statutory income; a solar farm operator is capped at 70%. That changes how quickly the tax benefit converts into cash.

How the Deduction Works in Practice

Once your qualifying capital expenditure is approved, you receive an allowance of either 60% or 100% of that spend, depending on the tier. You then set that allowance against your statutory income on your annual return.

The offset cap depends on which pot you’re in. GITA Asset claims and Tier 3 GITA Project claims can only reduce up to 70% of statutory income in a year of assessment. Tier 1 and Tier 2 GITA Projects can go against 100%.³

Whatever the allowance cannot absorb in a given year carries forward to later years of assessment until it’s used up. Large capital projects under the 70% cap often take several years to work through, even after the incentive period itself has ended. Just remember the outer edges: qualifying expenditure has to be incurred between 1 January 2024 and 31 December 2026 to fall under the current framework.²

How to Apply

Where you file depends on which stream you’re using. Applying to the wrong agency wastes time you may not have.

GITA Asset

Asset applications go to MGTC. Submit one physical set of the MGTC GITA/A form with supporting documents to MGTC’s office in Bandar Baru Bangi, Selangor. Deadline: within 24 months of incurring the qualifying capital expenditure, or 36 months for green building claims. MGTC aims to approve complete applications within 21 working days; incomplete submissions restart that clock.²

GITA Project

Project applications go to MIDA. Submit three sets of the MIDA GT/JA form through the MIDA e-TRANS online portal. Once MIDA issues an interim approval letter, you send that letter with supporting documents to MGTC for project validation. MGTC then takes an additional 21 working days to verify the project once documentation is complete.⁴

One rule that catches applicants out: do not submit any claim to the Inland Revenue Board (LHDN) before MGTC issues your verification letter. Filing your tax return with a GITA deduction before that letter arrives puts the whole claim at risk.²

Documentation You’ll Need

For GITA Asset claims, prepare:

Confirmation that the equipment is listed in the MyHIJAU Directory.
Technical specifications with model numbers, capacity ratings, and performance data matching the approved asset categories.
Purchase invoices, installation costs, and a breakdown of total qualifying capital expenditure, with dates falling between 1 January 2024 and 31 December 2026.
Standard company incorporation and registration records.

For GITA Project applications, the pack is heavier: operational plans or blueprints for the venture, projected environmental impact data, financial projections, and a capital expenditure schedule matched to the tier you’re claiming under.

Reporting and Record-Keeping

Once you hold the MGTC verification letter, you report the approved allowance on Form C, the standard corporate income tax return filed with LHDN. LHDN cross-references the claim against MIDA and MGTC data, so any gap between the approved amount and the amount claimed will draw scrutiny. Keep the verification letter, invoices, and application file together as one package.⁵

Malaysian tax law requires businesses to retain records for at least seven years from the end of the year to which the income relates.⁶

Group structures carry extra conditions on the project side. The green project must operate in a separate location from other group activities, use dedicated equipment that wasn’t transferred from related companies, and employ its own workforce (management staff and directors excepted). If MGTC withdraws approval for non-compliance, eligibility for the incentive is lost.²

What GITA Does Not Cover

GITA is an allowance against capital expenditure. If your company earns income from providing green services or leasing solar systems, the relevant incentive is the separate Green Income Tax Exemption (GITE), which exempts a percentage of statutory income rather than allowing a deduction on assets. GITE also runs through 31 December 2026 for new applications and is applied for through MIDA’s e-TRANS portal, with validation from MGTC or SEDA Malaysia depending on the activity.⁴

1
Malaysian Green Technology and Climate Change Corporation. Green Investment Tax Allowance
2
Malaysian Green Technology and Climate Change Corporation. Green Technology Tax Incentive Guidelines – GITA Asset
3
Malaysian Investment Development Authority. Guideline on Application for Green Technology Incentive
4
Malaysian Green Technology and Climate Change Corporation. Guidelines for Green Technology Tax Incentive (GITA/GITE)
5
Lembaga Hasil Dalam Negeri Malaysia. Company Return Form Under Section 77A of the Income Tax Act 1967
6
Lembaga Hasil Dalam Negeri Malaysia. Public Ruling No. 5/2000 (Revised) – Keeping Sufficient Records