Guideline on Claiming Accelerated Capital Allowance (ACA) for a Company in Post Reinvestment Allowance (RA) period

MIDA has recently issued the Guideline and Procedures on Application for Confirmation Letter by a Company Which Manufacturers Promoted Products under the Promotion of Investments Act, 1968 to Claim for Accelerated Capital Allowance (ACA) Under the Income Tax Act, 1967.The following are some salient points found in the guidelines:

· After the 15-year period of eligibility for reinvestment allowance (RA), a company that reinvests in the manufacture of promoted products is eligible to apply for Accelerated Capital Allowance (ACA).

· The ACA allows the capital expenditure to be recouped within three years; i.e. an initial allowance (IA) of 40% plus annual allowance (AA) of 20% for the first year and AA of 20% for each the following two years.

Application procedure

·         Applications should be submitted to the Inland Revenue Board (IRB), accompanied by a letter from MIDA certifying that the company is manufacturing promoted products under the Promotion of Investments Act, 1986.

To apply for the letter of confirmation from MIDA, 2 sets of the application forms, ACA-Application for Confirmation Letter for a Company which Manufactures Promoted Products under the Promotion of Investments Act, 1986 to claim the Accelerated Capital Allowance (ACA) under the Income Tax Act, 1967 should be submitted together with a copy each of the following documents:

(i) Memorandum and Articles of Association;

(ii) Certificate of Incorporation (Form 9); and

(iii) Registered Address (Form 44).

·         The application should be submitted to:

Chief Executive Officer
Malaysian Investment Development Authority (MIDA)
MIDA Sentral
No. 5, Jalan Sentral 5
50470 Kuala Lumpur
P.O. Box 10618
50720 Kuala Lumpur

Members can read the full text of the guideline and download the form from the MIDA website.