25 July 2024

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A. TAX INCENTIVE FOR GREEN INITIATIVE

In Malaysia, there is an increasing emphasis on environmental sustainability and green initiatives, driven by both government policies and private sector efforts. To support this, tax incentives play a crucial role in promoting investments in green technology and sustainable practices, aiming to foster eco-friendly business solutions and support Malaysia’s commitment of achieving carbon neutrality by 2050.

Malaysia’s development agenda reflects the importance of addressing environmental issues and fighting climate change, with green initiatives playing a key role. Strategic tax incentives are crucial in mitigating the financial challenges of implementing sustainable solutions across different economic sectors. These efforts are outlined in the Green Technology Master Plan Malaysia 2017-2030, which serves as the country’s blueprint for promoting a green economy.

The Green Technology Tax Incentive for purchase and use of green technology was announced by the Prime Minister during the 2014 Budget 2014. The Incentive provides Investment Tax Allowance (GITA) for the purchase of green technology equipment / assets and Income Tax Exemption (GITE) for green technology service providers. Meanwhile, in the 2020 Budget, the Government announced the extension of GITA for the purchase of green technology assets and GITE on the use of green technology services. The GITE has also been extended for companies undertaking solar leasing activity. This was done to further boost the Malaysian green economy and to attain the nation’s goal to generate 20% of its energy consumption from renewable sources by 2025. This is also in-line with the Malaysia’s commitment to reduce 45% of Green House Gases emission by 2030.

The main objectives of these tax incentives are, firstly, to boost investment in green technology projects either for business purposes or own consumption; secondly, to motivate companies to acquire green technology assets; and, finally, to increase the number of green technology service providers.

B. TYPES OF TAX INCENTIVES

The main incentives of GITA and GITE are divided into 4 categories, namely:-

1. GITA Assets
2. GITA Projects
3. GITE Services
4. GITE Leasing

1. GITA Assets

GITA Assets is applicable for companies that acquire qualifying green technology assets and listed under MyHIJAU Directory for their own use/consumption. Companies applying for GITA Assets must minimize environmental degradation or reduce greenhouse gas emissions; promote health and environmental improvement; and conserve energy, water, or natural resources, promote renewable energy use, or recycle waste materials.

Companies can claim GITA and other incentives (e.g. reinvestment allowance or income tax allowance) for different business activities, as long as the same asset does not receive multiple incentives. If an asset qualifies for both GITA and another incentive for the same business activity, the company must only choose one incentive. Companies already benefiting from energy-efficient or renewable energy incentives can qualify for GITA for additional investments, provided the same asset is not used for multiple incentives. If energy-efficient or renewable energy incentives have not been claimed in the tax computation, companies can opt to claim for GITA.

2. GITA Projects

GITA Projects is applicable for companies that undertake qualifying green technology projects for business or own consumption. . Companies applying for GITA Projects must minimize environmental degradation or reduce greenhouse gas emissions; promote health and environmental improvement; and conserve energy, water, or natural resources, promote renewable energy use, or recycle waste materials.

Companies within the same group undertaking the same green project as their parent company / related companies must ensure that the project must be in a separate building / location from other activities of the parent or related companies. The plant, machinery, and equipment used must be separate and not transferred from the parent or related companies. Employees for the project must be separate, except for management staff and directors. The project should not reduce the investment of the parent or related companies.

Companies claiming under GITA Projects can also claim other incentives such as those under the Promotion of Investments Act 1986, Reinvestment Allowance under Schedule 7A or Investment Allowance for the service sector under Schedule 7B of the Income Tax Act 1967 and GITA Asset under the Income Tax Act 1967 for Rainwater Harvesting System for different assets subject to compliance with the conditions set.

3. GITE Services

GITE Services are applicable for qualifying green technology service provider companies that are listed under the MyHIJAU Directory. To be qualified as green technology service provider, the companies must employ at least five full-time employees in Malaysia, including at least two competent personnel in green technology and maintain a documented Standard Operating Procedure (SOP) to ensure service quality. The companies must adopt a green policy related to environmental or sustainability practices and derive 100% of income from green technology services. The companies must also undertake at least three qualifying activities from the green technology sectors such as audit, engineering, procurement, consultancy / advisory, system design, testing, commissioning, installation, maintenance, repair & overhaul (MRO), funding, certification / verification.

The competent personnel must be permanent staff of the company and hold a certificate of competency recognized by the Government, MGTC, or a professional body in Malaysia. Such personnel must also actively participate in the professional body or qualification agency with updated Continuing Professional Development (CPD) points and actively practice in the field, with up-to-date registration / CPD points.

4. GITE Leasing

GITE Leasing is applicable for qualifying green technology service provider companies that provide solar leasing services verified by SEDA and are listed under the Registered Photovoltaic Investor (RPVI) Directory. RPVI refers to a company registered under SEDA Malaysia under the RPVI directory having the role to provide the solar leasing to NEM applicant. The companies must employ at least five full-time employees in Malaysia, including at least two competent personnel in green technology. The competent personnel must hold a certificate of competency recognized by the Government or a Professional Body in Malaysia.

CONCLUSION
Malaysia’s commitment to environmental sustainability and the development of a green economy is evident through its comprehensive tax incentives and policy initiatives. The Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) are pivotal in promoting the adoption of green technology and sustainable practices across various sectors. By minimizing financial barriers and providing substantial incentives, these measures not only encourage businesses to invest in eco-friendly solutions but also align with the nation’s ambitious goal of achieving carbon neutrality by 2050. Through continuous collaboration between the government, private sector, and the community, Malaysia is well-positioned to achieve its environmental objectives and contribute to global efforts in combating climate change.

Authors

Feruz Anwar Seth

Chee Wei Lum (Pupil-in-Chambers)

Disclaimer: The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

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Personal Data Protection Notice

We at ZUL RAFIQUE & partners recognize the importance of privacy and the sensitivity of personal information. As required under the Personal Data Protection Act 2010, the purpose of this Personal Data Protection Notice (“Notice”) is to inform you how we collect and process your personal data when you appoint or engage us to provide services, when you access and use our website or interact with us including through meetings, seminars, conferences or events.

By appointing or engaging us to provide services to you, by accessing and using our website or by interacting with us, you consent to us using, collecting and processing your personal data in the manner contemplated in this Notice.

This Notice may be amended or updated from time to time. We would advise you to check this Notice on our website from time to time for amendments or updates. By continuing to use or engage our services, to use our website or to communicate with us subsequent to any amendments or updates to this Notice, it would confirm and indicate your acceptance to the amendments or updates to this Notice.

What Personal Data Do We Collect?

Personal data generally means any information that identifies you. Your personal data is collected and processed by us at the start of our services or interaction and, from time to time, in the course of our engagement or interaction.

The type of personal data collected and processed by us includes:

name, date of birth, nationality, gender, NRIC / passport number, residency status, correspondence address, contact details including mobile, office and residential telephone number and facsimile number, e-mail address, banking details, financial / creditworthiness information;
employment category (private sector, government sector, self-employed, non-working or others), name of employer and office address, details of relationship with the company (e.g. promoter, director, shareholder);
such other information relevant or required for:
- our legal engagement;
- provision of legal services for the purposes of the legal engagement or legal transaction; and
- compliance with legal and regulatory requirements; and
any additional information provided by you or third parties about you.

Source of Personal Data

Personal data collected will mainly be from you. However, some personal data may also be collected by us from other available sources including but not limited to credit reporting agencies, government department or agencies, public registries, websites, social media, publications, events, seminars, conferences.

How Do We Use Your Personal Data

Your personal data is collected and processed by us for our business activities including the following purposes:

to verify your identity;
to communicate with you including responding to your enquiries;
all purposes related to or in connection with our legal engagement;
to provide legal services for the purposes of the legal engagement or transaction;
to comply with legal and/or regulatory requirements including court orders;
for our day to day operations and administrative purposes including file management, billing and collection, audits, reporting, investigations etc.;
for the purposes of enforcing or defending our legal rights and/or obtaining legal advice;
to send you materials or publications including newsletter, articles or updates or information about events, conferences, seminars, talks which may be of interest to you;
to promote, offer or market our services to you;
to send as potential referees to (i) editors/researches in ranking legal publication and journals and/or (ii) clients/potential clients who request for referees of past work in relation to any proposal, submissions, tenders or bids;
to assist in the prevention, detection or investigation of crime or possible criminal activities or for the administration of justice;
for security and internal audit purposes;
for such other purposes as may be directed or consented to by you; and
for all other purposes in relation to or incidental to the above.

Disclosure of Your Personal Data

Under certain circumstances, we may be required to disclose your personal data to third parties. Third parties to whom your personal data may be disclosed by us are as follows:

any persons directed by or consented to by you;
any persons required for the purposes of the legal engagements and/or legal transactions including but not limited to counter parties, other advisors, financial institutions, regulatory bodies etc;
any person for the purposes of compliance with legal and regulatory requirements;
our data processors i.e. third party who we engage to process personal data on our behalf including but not limited to archival storage, data entry service providers, computer backup services, disaster recovery services, banks and financial institutions etc.; and
our professional advisors including but not limited to legal advisors, tax advisors, financial advisors, auditors, insurance brokers etc.

Further, we may also be required to transfer your personal data outside of Malaysia for the purposes and to such third parties stated in this Notice. The transfer of your personal data outside Malaysia would also be required if you are travelling, residing or based outside Malaysia.

Obligation to Provide Personal Data

We acknowledge that you have the right in deciding the information you wish to provide to us. The provision of the information listed above is voluntary in nature. However, please note that if you do not provide the information above or limit the way such information is to be processed, it may result in us not being able to:

communicate or correspond with you;
undertake the legal engagement or transaction and/or to provide our services to you; and/or
grant you access to our website.

Data Access and Data Correction

If you wish to request:

for access to your personal information;
for your personal data to be corrected or updated; or
to withdraw your consent or limit the use of your personal data;

please submit your written request to:

Assistant Manager Human Resources and Administration Department

Zul Rafique & Partners
D3-3-8 Solaris Dutamas
No.1 Jalan Dutamas 1
50480 Kuala Lumpur, Malaysia

Telephone : 03-6209 8228
Facsimile : 03-6209 8331

An administrative charge may be imposed for any request under paragraph (a) and (b) above.

Further, we reserve the right to refuse your requests for any reasons permitted under law.

Disclaimer

The accuracy and completeness of your personal data depends on the information you provide. We assume that the information you have provided is accurate, up to date and complete unless you inform us otherwise.

Where you provide any third party information to us including but not limited to employer, colleagues, family information, it is our assumption that such information is accurate, up to date and complete and that you have obtained the necessary consent to disclose the same.

Conflict

In the event that there is any conflict between the English and national language version of this Notice, the English language version shall prevail.

Notis Perlindungan Data Peribadi

Kami di ZUL RAFIQUE & partners menghormati kepentingan privasi dan sensitiviti data peribadi anda. Sebagaimana yang dikehendaki di bawah Akta Perlindungan Data Peribadi 2010, Notis Perlindungan Data Peribadi ini (“Notis”) bertujuan untuk memaklumkan kepada anda bagaimana kami mengumpul dan memproses data peribadi anda apabila anda melantik pihak kami untuk memberikan perkhidmatan. Bukan itu sahaja, Notis ini turut bertujuan untuk memaklumkan kepada anda bagaimana kami memproses data peribadi anda apabila anda mengakses dan menggunakan laman sesawang kami atau berhubung dengan kami melalui mesyuarat, seminar, ataupun persidangan.

Dengan melantik kami untuk memberikan perkhidmatan kami kepada anda dan juga dengan mengakses dan menggunakan laman sesawang atau berinteraksi dengan kami, anda dengan ini telah bersetuju dengan penggunaan, pengumpulan dan pemprosesan data peribadi anda oleh pihak kami mengikut cara yang dinyatakan dalam Notis ini.

Notis ini akan tertakluk kepada pindaan dan pengemaskinian dari masa ke semasa. Oleh itu, adalah disarankan supaya pihak anda menyemak Notis ini di laman sesawang kami dari masa ke semasa untuk memastikan sebarang pindaan atau pengemaskinian yang dilakukan adalah dalam pengetahuan anda. Dengan meneruskan perlantikan dan penggunaan khidmat kami selepas apa-apa pindaan atau pengemaskinian yang dilakukan terhadap Notis ini, ia secara langsung menandakan penerimaan anda terhadap pindaan atau pengemaskinian yang dilakukan terhadap Notis ini.

Apakah Data Peribadi Yang Kami Kumpul?

Data peribadi secara amnya bermaksud apa-apa maklumat yang berkaitan dengan pengenalan diri anda. Tanggungjawab kami terhadap anda memerlukan kami mengumpul dan memproses data peribadi anda. Pemprosesan dan pengumpulan data peribadi anda bermula dari awal perkhidmatan kami bersama anda termasuklah sebarang interaksi diantara pihak kami dan anda, selepas itu, dari semasa ke semasa sepanjang tempoh pengambilan atau penggunaan khidmat kami.

Jenis data peribadi yang dikumpul dan diproses oleh kami adalah:

nama, tarikh lahir, kewarganegaraan, jantina, nombor kad pengenalan/passport, status kependudukan, alamat surat-menyurat, butiran perhubungan termasuk nombor telefon bimbit, pejabat dan kediaman dan faksimili, alamat email, butiran perbankan, maklumat kewangan / kepercayaan kredit;
kategori pekerjaan (sektor awam, kerajaan, bekerja sendiri, tidak bekerja atau lain-lain), nama majikan dan alamat pejabat, butiran hubungan dengan syarikat (sebagai contoh promoter, pengarah, pemegang saham);
maklumat-maklumat lain yang relevan dan perlu untuk:
- melantik kami untuk memberi khidmat guaman
- memberi khidmat guaman; dan
- menepati keperluan undang-undang dan pengawalseliaan.
apa-apa maklumat tambahan yang diberikan oleh anda atau pihak-pihak ketiga berkenaan dengan anda.

Sumber Data Peribadi

Kebanyakan data peribadi yang dikumpul oleh kami adalah data peribadi yang dikemukakan kepada kami oleh anda. Walaubagaimanapun, data peribadi anda juga boleh dikumpul oleh kami dari sumber-sumber yang lain termasuk tetapi tidak terhad kepada agensi pelaporan kredit, agensi atau jabatan kerajaan, pendaftaran awam, laman sesawang, media sosial, penerbitan, seminar, dan persidangan.

Bagaimana Kami Menggunakan Maklumat Peribadi Anda

Sebagai sebuah firma guaman, kami mengumpul dan memproses data peribadi anda untuk tujuan berikut:

pengesahan identiti anda;
berkomunikasi dengan anda termasuk memberikan maklum balas terhadap pertanyaan anda;
semua tujuan berkaitan dengan perlantikan kami;
untuk memberikan khidmat guaman;
untuk mematuhi keperluan undang-undang dan pengawalseliaan termasuklah perintah mahkamah;
bagi operasi harian kami dan tujuan pentadbiran termasuklah pengurusan fail, bil dan kutipan, audit, laporan, penyiasatan dsb.;
bagi tujuan menguatkuasakan dan mempertahankan hak-hak perundangan kami dan/atau mendapatkan nasihat perundangan;
menghantar bahan-bahan atau penerbitan termasuklah surat berita, artikel- artikel atau maklumat berkenaan majlis-majlis, persidangan-persidangan, seminar-seminar dan ceramah-ceramah yang mungkin menarik minat anda;
untuk mempromosi, menawar atau mengiklan perkhidmatan kami kepada anda;
untuk dihantar sebagai sumber rujukan berpotensi kepada (i) editor-editor / penyelidik-penyelidik di dalam penerbitan dan jurnal-jurnal dan/atau (ii) klien-klien / klien-klien berpotensi yang memohon rujukan kerja-kerja terdahulu berkaitan apa-apa cadangan, penghujahan, tawaran atau bidaan;
untuk membantu pencegahan, pengesanan atau penyiasatan jenayah atau kemungkinan aktiviti-aktiviti jenayah atau bagi pentadbiran keadilan;
tujuan audit dalaman dan keselamatan;
bagi tujuan lain sebagaimana yang diarahkan atau yang telah diberikan persetujuan oleh anda; dan
bagi segala tujuan lain berkaitan atau bersampingan dengan perkara-perkara di atas.

Penzahiran Maklumat Peribadi Anda

Di bawah keadaan-keadaan tertentu, kami boleh menzahirkan data peribadi anda kepada pihak ketiga seperti berikut:

mana-mana orang yang diarahkan oleh atau yang telah dipersetujui oleh anda;
mana-mana orang yang berkenaan bagi tujuan-tujuan perlantikan khidmat undang-undang dan/atau transaksi undang-undang termasuk tetapi tidak terhad kepada pihak lawan, perunding-perunding lain, institusi-institusi kewangan, badan-badan pengawalseliaan dsb;
mana-mana orang bagi tujuan pematuhan undang-undang dan pengawalseliaan;
Pihak pemproses data iaitu pihak ketiga yang akan berkhidmat bagi memproses data peribadi bagi pihak kami termasuk tetapi tidak terhad kepada storan arkib, pemberi khidmat kemasukan data, perkhidmatan-perkhidmatan sokongan komputer, perkhidmatan-perkhidmatan pemulihan bencana, bank-bank dan institusi-institusi kewangan dsb; dan
penasihat-penasihat profesional kami, termasuk tetapi tidak terhad kepada penasihat undang-undang, penasihat-penasihat cukai, penasihat-penasihat kewangan, juruaudit-juruaudit, broker-broker insurans dsb.

Kami juga boleh memindah data peribadi anda keluar dari Malaysia bagi tujuan-tujuan dan kepada pihak ketiga yang dinyatakan dalam Notis ini. Data peribadi anda juga akan dipindah keluar dari Malaysia jika anda berada di luar Malaysia.

Kewajipan untuk Memberi Data Peribadi

Kami mengakui bahawa anda mempunyai hak untuk menentukan maklumat yang diberikan kepada kami. Maklumat yang disenaraikan di atas adalah secara sukarela. Jika anda tidak memberi maklumat di atas atau mengehadkan cara bagaimana maklumat tersebut diproses, kami tidak dapat:

berkomunikasi atau berhubung dengan anda;
bertindak di dalam perlantikan atau transaksi undang-undang dan/atau memberi perkhidmatan kami kepada anda; dan atau
memberikan anda akses kepada laman sesawang kami.

Akses dan Pembetulan Data

Jika anda ingin:

mengakses maklumat peribadi anda;
memperbetulkan atau mengemaskini data peribadi anda; atau
menarikbalik persetujuan anda atau mengehadkan penggunaan data peribadi anda,

sila hantar permintaan bertulis anda kepada:

Penolong Pengurus Jabatan Sumber Manusia dan Pentadbiran

Zul Rafique & Partners
D3-3-8 Solaris Dutamas
No.1 Jalan Dutamas 1
50480 Kuala Lumpur, Malaysia

Telefon : 03-6209 8228
Faksimile : 03-6209 8331

Caj pentadbiran akan dikenakan bagi permintaan di bawah perenggan (a), (b) dan (c) di atas.

Kami berhak untuk menolak permintaan anda jika dibenarkan di bawah undang-undang.

Penafian

Ketepatan dan kelengkapan data peribadi anda bergantung kepada maklumat yang anda berikan. Kami menganggap bahawa maklumat yang anda berikan adalah tepat, terkini dan lengkap melainkan jika anda memaklumkan sebaliknya kepada kami.

Kami menganggap bahawa maklumat pihak ketiga yang anda berikan kepada kami termasuk tetapi tidak terhad kepada maklumat majikan, maklumat rakan-rakan sekerja atau maklumat keluarga adalah tepat, terkini dan lengkap dan anda telah mendapatkan persetujuan yang sewajarnya untuk menzahirkan maklumat tersebut.

Percanggahan

Jika terdapat percanggahan diantara versi Bahasa Inggeris dan Bahasa Kebangsaan pada Notis ini, versi Bahasa Inggeris akan diguna pakai.

An Overview of Malaysia’s Green Investment Tax Allowance (GITA) & Green Income Tax Exemption (GITE)