Case Study 5

Reinvestment Allowance

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Understanding Reinvestment Allowance (RA)

RA, often called the second incentive, is for companies in manufacturing and agriculture that are based in Malaysia and have been running for over 36 months. If they spent money on expanding, modernizing, automating, or diversifying their operations in a specific period, they can enjoy this tax advantage.


How It Works

Eligible companies can claim RA, which is 60% of the money they spent on these improvements during the assessment year. They can then subtract this from their taxable income, but only up to 70% of their income, for 15 years straight.

When a company achieves a certain productivity level compared to a standard set by the Ministry of Finance, it might be allowed to claim 100% RA.

Client's Questions

  • What papers are needed to claim RA, like lists of machines and production efficiency details?

  • How exactly do we apply for RA?


KTP's Support

KTP is dedicated to helping clients make the most of this tax advantage:

  • We identify the expenses that qualify and gather the proof needed.

  • We check production reports to see if they're eligible for 100% RA against income.

  • We analyze the projects to make sure they fit the criteria.

  • We visit the actual improvements, like buildings and machines, to verify.


Positive Outcome

By claiming RA, a company can save money and potentially distribute more earnings to shareholders, benefiting everyone involved.

Ready to set sail towards your financial horizon?
Let’s get in touch with us.


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