Investment Tax Allowance 2026: Special Tax Incentives

What is Investment Tax Allowance?

Investment tax allowance is a special tax incentive. It rewards businesses that invest in qualifying equipment. The allowance is higher than standard capital allowance.

This incentive encourages business investment and growth.

Who Qualifies for Investment Tax Allowance?

Investment tax allowance applies to:

• Manufacturing equipment: Production machinery and tools
• High-tech equipment: Advanced technology and automation
• Green technology: Energy-efficient and eco-friendly equipment
• Promoted industries: Specific sectors qualifying for incentives

Investment Tax Allowance Rates

Standard Rate: 40%-60% of qualifying expenditure

Special Rate: Up to 100% for promoted activities

Example: RM100,000 qualifying equipment
• Investment tax allowance: RM60,000 (60%)
• Higher than standard 40% initial allowance

Bank vs. Ing Heng: Same Allowance, Better Terms

Factor	Bank	Ing Heng Credit
Down Payment	10-20%	0%
Investment Allowance	Same	Same
Equipment Age	5 years max	NO Age Limit

How to Apply for Investment Tax Allowance

Step 1: Check Eligibility

• Verify your equipment qualifies
• Check if your industry is promoted
• Review MIDA guidelines for qualifying activities

Step 2: Get Approval

• Apply to MIDA or relevant authority
• Submit equipment details and business plan
• Receive approval letter with allowance rate

Step 3: Claim the Allowance

• File claim in your tax return
• Attach approval letter from MIDA
• Claim over the approved period

Investment Tax Allowance + 0% Down Payment

Combine investment tax allowance with 0% down payment:

• Higher deduction: 60-100% allowance vs 40% standard
• No upfront cost: 0% down payment
• More cash preserved: For business operations
• Interest also deductible: Additional tax savings

Used Equipment for Investment Allowance

Some used equipment qualifies too:

• Certain manufacturing equipment: May qualify for investment allowance
• Refurbished equipment: Qualifies for some incentives
• Banks reject: Used equipment older than 5 years
• Ing Heng accepts: Any age equipment that qualifies

Qualifying Industries for 2026

Check these promoted industries for 2026:

• Advanced manufacturing: High-tech production equipment
• Green technology: Renewable energy and energy-saving equipment
• Automation: Robotics and smart manufacturing
• Logistics: Advanced material handling systems

Investment Tax Allowance Calculator

Step 1: Determine qualifying expenditure

Step 2: Multiply by allowance rate

Example: RM150,000 qualifying equipment at 60%
RM150,000 × 60% = RM90,000 investment tax allowance

2026 Investment Tax Allowance Tips

1. Check eligibility: Before buying equipment
2. Apply early: Get approval before purchase
3. Use 0% down: Preserve cash while claiming allowance
4. Keep documents: MIDA approval, invoices, proof of use
5. Claim correctly: Follow approved schedule

Real Tax Savings

"Manufacturing business. Bought RM200,000 automated machine. Applied for investment tax allowance. Got 60% rate = RM120,000 deduction. Combined with 0% down payment financing. Preserved RM40,000 cash (would have been 20% down payment). Taxable income reduced by RM120,000. Saved over RM28,000 in taxes. Machine increased production by 50%. Investment tax allowance made expansion affordable."

— Kumar Rajan, Manufacturer

Get Your Investment Tax Allowance

Investment tax allowance provides higher deductions. 0% down payment preserves your cash. 100% full loan maximizes your investment. NO age limit on qualifying equipment.

We approve in 24-48 hours. Buy qualifying equipment and claim investment tax allowance today.