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AUTOMATION CAPITAL ALLOWANCE (AUTOMATION CA) FOR MANUFACTURING AND SERVICES SECTORS

Manufacturers involved in innovative and productive activities eligible for an Automation Capital Allowance (Accelerated Capital Allowance) of 200% on the first RM10 million of qualifying capital expenditure.

Automation Capital Allowance (Automation CA) For Manufacturing And Services Sectors

1) Objective:

The Automation Capital Allowance (Automation CA) was introduced to encourage adoption of automation among manufacturing companies.

2) Tax Incentive

Categories

Tax Incentive

1.

High labour-intensive industries (rubber products, plastics, wood, furniture and textiles)

2.

Other industries including Service Sector

Automation CA of 200% on the first RM10 million in qualifying expenditure incurred within year of assessment from 2023 to 2027.

3) Eligibility Criteria

  • Companies must be incorporated under the Companies Act 2016;
  • Tax residents of Malaysia;
  • Companies must have been operating in manufacturing or services activities for a minimum of 36 months;
  • The company must incur expenditures for at least one (1) machinery /equipment / software / system with an adaptation of Industry 4.0 within the eligible amount of RM10 million
  • Industry 4.0 elements:
  • √ Big Data Analytics;
  • √ Cloud Computing;
  • √ Augmented Reality;
  • √ Cybersecurity;
  • √ Artificial Intelligence;
  • √ Additive Manufacturing;
  • √ System Integration;
  • √ Simulation;
  • √ Internet of Things (IoT);
  • √ Autonomous Robots;
  • √ Advanced Materials.

This incentive is eligible to be considered for application received by MIDA from 1st January 2023 until 31st December 2027.

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