As Malaysia continues to drive digital transformation and sustainable growth, the government has rolled out several key tax exemptions and incentives to help businesses stay competitive and innovative. Here’s a quick overview of what companies should know in 2025:
- E-Invoicing Incentives
- To encourage digital tax compliance, businesses investing in e-invoicing systems can enjoy Accelerated Capital Allowance (ACA) benefits claiming 20% upfront and 40% annually on eligible hardware and software. Plus, consulting and training costs for implementing these systems are fully deductible.
- Pioneer Status & Investment Tax Allowance (ITA)
- High-tech firms and companies in green technology or strategic sectors can benefit from tax exemptions ranging from 70% to 100% on statutory income for up to 10 years under Pioneer Status. Those not qualifying can still claim generous Investment Tax Allowances on qualifying capital expenditure.
- MSC Malaysia Status Companies
- Businesses operating in the digital economy under the MSC Malaysia 3.0 framework enjoy 100% tax exemption on qualifying income for 5 years, supporting Malaysia’s vision as a tech hub.
These incentives not only reduce taxable income but also encourage investment in innovation and sustainability key drivers for business growth in Malaysia’s evolving economy.