Guideline for manufacturers of Electric Vehicle Charging Equipment

Following the announcement in the retabled Budget 2023, MIDA published on its website the guidelines for manufacturers of Electric Vehicle (“EV”) charging equipment to be exempted from tax dated 14 August 2023. The application period for the incentive is from 25 February 2023 to 31 December 2025. 
The following incentives are available for new and existing companies undertaking expansion and/or diversification for manufacturing of EV charging equipment. 
​Type of Incentive

100 % Income Tax exemption on the statutory income
  • ​The incentive is granted for a period of 10 YAs, from YA 2023 to YA 2032;
  • Any unabsorbed losses can be carried forward for seven consecutive YAs;
  • The incentive will be provided under the Income Tax (Exemption) (No. 11) Order 2006 [P.U.(A) 112].

100 % Investment Tax allowance on the QCE. The allowance can be offset against 100 % of statutory income of the qualifying business activity
  • ​The allowance is granted to the QCE incurred for a period of five years;
  • Any unabsorbed investment tax allowances can be carried forward until fully utilized;
  • The incentive will be provided under the Income Tax (Exemption) (No.12) Order 2006 [P.U.(A) 113].

Eligibility criteria 

To qualify for the incentives, the manufacturing company must: 
  • be incorporated under the Companies Act 2016;
  • have a Manufacturing Licence (“ML”) or ML exemption; 
  • incur an adequate investment level and operating business expenditures for the proposed project;
  • have full-time employees comprising at least 80 % Malaysians;
  • the value add for company’s product(s) must be at least 20 %;
  • science and technical staff index must be at least 15 % of the company’s full-time workforce;
  • nurture/collaborate with local vendors in the sector in terms of technologies, capabilities, certification, human capital development, etc.;
  • provide an adequate number of Malaysian internships at the technical and vocational education and training level (“TVET”) or at least at diploma level; or collaborate with TVET institutions/institutions of higher learning in relevant fields. 

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Priya Selvanathan

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