TAX INCENTIVES FOR AUTOMATION

Incentives for manufacturing companies in the form of Accelerated Capital Allowance (ACA) and Automation Equipment Capital Allowance (AEA) for automation equipment are currently given to the following categories:

  • First Category: for high labour intensive industries (such as rubber products, plastics, wood, furniture and textiles), an automation capital allowance of 200% (ACA of 100% and AEA of 100%) is provided on the first RM4 million of qualifying capital expenditure incurred; and
  • Second Category: for other industries, automation capital allowance of 200% (ACA of 100% and AEA of 100%) is provided on the first RM2 million of qualifying capital expenditure incurred within 8 years of assessment from 2015 to 2023.

Relevant Link

Reinvestment Allowance

  • RA is a special tax incentive available for company
    • resident in Malaysia which has been in operation for no less than 36 months
    • incurred capital expenditure to expand, modernize, automate, or diversify existing manufacturing business or approved agricultural project
  • 60% of Qualifying Capital Expenditure incurred and can be utilized against 70% of statutory income
  • LHDN Public Rulings No. 10/2020 & 11/2020

Grant/Financing

  • Industry 4.0 (Industry4WRD)
    • Industry4WRD Intervention Fund
    • Industry4WRD Domenstic Investment Strategic Fund (DISF)
  • Smart Automation Grant
    • for Small And Medium Enterprises (SMEs) and Mid-Tier Companies (MTCs) in Manufacturing and Services Sector
    • given on a 1:1 matching basis based on eligible expenditures, up to RM 1 million per company
  • Skim Jaminan Pinjaman Perniagaan (SJPP) – Automation & Digital Guarantee Scheme
  • Soft Loan Scheme for Automation and Modernisation (SLSAM)
  • SME Automation & Digitalisation Facility (ADF)
  • People and Economic Strategic Empowerment Programme (Pemerkasa)
    • SME Bank will provide loan fund of RM200 milion to finance the purchase of machinery with grant incentive up to 20% of the machine value

Need financing? We can assist.

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Xtrotech Sdn Bhd (672655-P)

Tel: +603 – 5511 3388 / 3318

Mobile: +012 – 203 7364

Email: sales@xtrotech.com.my

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