Client Overview
A European-owned formwork manufacturer with manufacturing, trading and services operations in Malaysia.
Engagement Scope
Tax incentive advisory and application management for the automation capital allowance.
Challenge
- The client had invested in machinery to automate its processes.
- The investment was meant to raise production output and quality control, and to reduce dependence on foreign labour.
- The client was not familiar with the regulatory and incentive environment for the automation capital allowance, which gives a 200% allowance on up to RM10 million of qualifying capital expenditure, set against the company’s statutory income.
Our Approach
- Gathered the relevant information from the client.
- Applied for the tax incentive on the client’s behalf.
- Liaised with the processing agencies, MIDA and SIRIM, on the client’s behalf.
Deliverables
- Automation capital allowance application, prepared and submitted on the client’s behalf.
- End-to-end liaison with MIDA and SIRIM through to approval.
Outcome
- The automation capital allowance was approved on all of the client’s qualifying capital expenditure of just over RM7 million.
- At the 200% rate, that gives an allowance of nearly RM15 million to set against the company’s statutory income, reducing the tax it pays, as the Malaysian government intends.
Capabilities Demonstrated
- Tax incentive advisory for automation and Industry 4.0 investments.
- End-to-end incentive application management, from information gathering to approval.
- Government agency liaison with MIDA and SIRIM on the client’s behalf.
- Guiding foreign-owned manufacturers through Malaysia’s incentive environment.
Agencies and Stakeholders
- MIDA (Malaysian Investment Development Authority)
- SIRIM
Automation capital allowance of nearly RM15 million secured on all of a European-owned manufacturer’s qualifying automation spending.