Malaysia’s Budget 2026 introduces several strategic tax incentives aimed at fostering innovation, sustainability, and workforce development within the corporate sector. Whether you’re a startup, SME, or large enterprise, these new deductions can significantly enhance your bottom line and support long-term business growth.
Key Tax Deductions for Companies in Budget 2026
1. Double Tax Deduction for Care Worker Training
Companies sponsoring recognized care worker training programs under the Ministry of Women, Family, and Community Development can now enjoy a double tax deduction. This extension, previously available only for companies sponsoring training for persons with disabilities, aims to professionalize the care sector and address the growing demand for skilled care workers NST Online.
2. 50% Additional Tax Deduction for AI and Cybersecurity Training
To bolster Malaysia’s digital capabilities, Budget 2026 offers a 50% additional tax deduction for SMEs investing in AI and cybersecurity training programs recognized by the MyMahir National AI Council for Industry (NAICI). This initiative encourages businesses to upskill their workforce in line with technological advancements Malaysian Institute of Accountants.
3. Capital Allowance for ICT Equipment
Companies investing in Information and Communication Technology (ICT) equipment can now benefit from an Accelerated Capital Allowance (ACA), with an initial allowance of 20% and an annual allowance of 40% on qualifying capital expenditures. This incentive is available for ICT investments made between 11 October 2025 and 31 December 2026, aiming to accelerate digital transformation across industries ziclegal.com.
4. Tax Deduction for Tourism Project Renovations
Operators of tourism projects registered with the Ministry of Tourism, Arts, and Culture undertaking renovations and refurbishments can claim a tax deduction of up to RM500,000 on qualifying capital expenditures. This measure supports the enhancement of Malaysia’s tourism infrastructure and promotes a vibrant tourism industry ziclegal.com.
5. Green Investment Tax Allowance (GITA)
Companies utilizing green technology products certified by the MyHIJAU Mark in their local supply chains are eligible for a 100% Green Investment Tax Allowance (GITA). This incentive encourages businesses to adopt sustainable practices and contributes to Malaysia’s green economy objectives ltt-cfo.my.
Why These Deductions Matter
These new tax deductions are designed to:
- Promote workforce development through training in essential sectors like care work and digital skills.
- Encourage technological advancement by supporting investments in ICT and cybersecurity.
- Stimulate infrastructure development within the tourism industry.
- Advance sustainability goals by incentivizing the adoption of green technologies.
By leveraging these incentives, companies can reduce their tax liabilities while investing in areas that drive long-term growth and competitiveness.
Tips for Companies to Maximize Tax Benefits
- Maintain comprehensive records of all qualifying expenditures and training programs.
- Consult with tax professionals to ensure compliance with eligibility criteria and proper documentation.
- Plan investments strategically to align with the timelines and requirements of available tax incentives.
- Stay informed about any updates or changes to tax policies that may impact your business operations.
To know more, refer here.