PusatTenagaMalaysia - SEDA

1 Pus at Ten aga MalaysiaNo. 2, Jal an 9/1 0, Pe rs ia ran Us ahawan,Seks yen 943650 Band ar Ba ru Ba ng i, Selan gor Daru l Eh san, Mal aysi aGL: +6 03 892 1 080 0 Fa x: +6 03 8921 0911 Email : in fopv et .myWebs ite: www .m bipv. net .myMi ni st ry ofFi nance11. Introdu ct ion22. Pu rpo se of Han dbook23. Defin ition s24. Fiscal Incen tiv es for Ren ew abl e Ene rg y (RE) El ig ibility for RE Incen Typ es of Incen ti ves fo r .1 Pioneer Sta tus (PS) .2 Inv estment Tax Al lowanc e (ITA) .3 El igible Ac tivities for PS and .4 Impo rt Dut y and Sa les Ta x Ex empt ion55. Fiscal Incen tiv es for En ergy Effi ci ency(EE) El ig ibility for EE Incen ti Typ es of Incen ti ves fo r .1 Pioneer Sta tus (PS) .2 Inv estment Tax Al lowanc e (ITA) .3 El igible Ac tivities for PS and .4 Impo rt Dut y and Sa les Ta x Ex empt ion66.

2 Choi ce of Opt imum Incenti El ig ibility for PQ Incen Typ es of Incen ti ves fo r PQ77. Appl icat ion Process fo r RE an d EE Incent Th ird Par ty Dist ri buto rs for Import Du tyan d Sal es Tax Exem pti on88. Con cl us ion s9 Annex 1:Ca lculations for ITA benefi ts10 Annex 2:Extracts fro m Budg et 20 0915 Annex 3:MIDA Gui de line s17 Annex 4:ST Gui del ine s25 TableofContentsKE MEN TER IAN TEN AG A, TE KNO LO GIHIJA U DAN AIRBl ok E 4/5 , Ko mp leks Keraj aan EPu sat Pen tad biran Ker aja an Persekutu an62668 Put raj ay aMa lays iaTel :603 888 3 600 0 Fax :603 888 9 133 5 Webs ite : www .kettha. gov .myWit h cont ri but ions fro m:KE MEN TER IAN KEW AN GA NWebs ite : www .treasu ry .g ov .myKA ST AM DIRA JA MA LAYSIA ,Webs ite : www .custo ov .myLEMBAG A HA SIL DA LAMNEG ERIWebs ite : www .hasi .m ySU RU HA NJA YA TE NA GAWebs ite : www.

3 St. gov .m yMA LAY SIA N IND USTRIA LDEVELOP MEN T AU THO RITYWebs ite : www .mi ov .myCompile d by:PU SAT TENA GA MA LAY SIANo. 2, Jal an 9/ 10 Per siar an Usa hawan , Seksy en 943650 Band ar Baru BangiSel an gor Darul Eh sanWebs ite : www .ptm .org .m ySE P 200 9 Address32 Messa geBy the Min isterAs Malaysiaprogressestowardsthe status of a developednation,wehave a choiceof variousfuel sourcesthat will definethe energylandscapeof the countrycould continuethe pursuitonfossil fuel path or make the necessaryadjustmentof pursuingcleaneralternativesto 9th April 2009, our 6th PrimeMinister, Datuk Sri Najib Tun Razak has pushedforwardGreenTechnologyto the signalsa strongcommitmentby the Governmentof Malaysiato addresslong termsolutionsfor the sustainabilityof our , the Ministryof Energy,Water and Communicationhas been renamedMinistryofEnergy,Green Technologyand launchingof the NationalGreen TechnologyPolicy.

4 Being the cornerstoneof green developmentfor Malaysiafurtherpaved the way forwardon Malaysia scommitmenttowardsthe path of green is no doubt about the finite fossil fuel on about the durationof supply,we are aware that everycountryis takingall possiblemeasuresto the potentialto generateelectricityfrom indigenousenergysourcesand conservethe use of electricityvia such, the Governmenthas providedvariousfiscalincentivesto encouragethe generationand uses of RenewableEnergyas well as the adoptionof Guidebookon Incentiveson RenewableEnergyand EnergyEfficiencyhas been compiledby my Ministrywith supportfromrelevantMinistriesand agenciesfor the benefitof RE & EE Malaysiamovesalong the continuumof fossil fuel towardsrenewableenergyand energyefficiency,the Governmentcalls forparadigmshift amongstour peopleto embracegreen technologyinour businessesand Guidebookis one of manyefforts to promoteRenewableEnergyand now I urge everyoneto take the first step and make the best useof this Guidebookas your pledgefor a better B.

5 Da tuk Pe te r Ch in Fah Ku iMin iste r of En ergy, Gr ee n Te chnol ogy and Wat erSe pte mb er 2009 ForewordBy the Sec ret ary Gene ra lThe Governmentof Malaysiahas promotedthe use of RenewableEnergy(RE) and the adoptionof EnergyEfficiency(EE) for sustainabledevelopmentby grantingincreasinglyattractivefiscal incentivesfor theenergyusers to reducetheir cost of doing businessand to maintaintheir competitiveedge in the Guidebookdetails the variousincentivesavailableto energyusersso that they can take advantageof the incentivesfor their is targetedat potentialdevelopersand users of RE aswell as consumerswho can benefitfrom adoptingEE see more extensiveuse of RE and adoptionof EEinitiativesby energyusers who can take advantageof the incentivesto enhancetheir businesscompetitivenessand Guidebookis producedby KeTTHA with close cooperationfromrelatedGovernmentagencies such as KementerianKewangan(MOF)and its agencies- LembagaHasil DalamNegeri(LHDN)and KastamDiraja Malaysia(KDRM);LembagaKemajuanPerindustr ianMalaysia(MIDA).

6 SuruhanjayaTenaga(ST) and Pusat TenagaMalaysia(PTM) incompletingthis thank these agenciesfor their cooperationin this Guidebookwill be distributedextensivelyto the industrygroupssuch as Federationof MalaysianManufacturers(FMM),Small andMediumIndustriesDevelopmentCorporatio n(SMIDEC),and otheruser groupsand NGOsto assist them to take advantageof theincentivesthat are that the disseminationof this informationwill result inmore energyusers takingadvantageof the incentivesprovidedtoreducetheir cost of doing businessand improvetheir these initiativeswill not only reduceproductioncosts but also help mitigateenvironmentaldegradationand help toensurea sustainableworld for our future Bhg . Dat o Dr. Hal im ManSec re tary Ge ne ra lMini st ry of Ener gy, Gre en Te ch nology and Wa te r2 Sept em be r 200912354In tr od ucti onTh e Gov er nm en t of Malaysia offers at trac tive incentive s to enc ourage the gene ra tion ofRe new able Ene rgy (R E) and the ado pt ion of Ene rgy Ef fic iency (EE) init iative s as wel l as forimprov em en t of Pow er Qua lity (PQ) amo ng st ene rgy pro duce rs and us ers in Ma lays ia an dto ens ure sus tained na tional economi c deve lopme nt for the fut ure.

7 The Min istr y of Ener gy,Gre en Te chnol ogy an d Wa te r (MEGTW)is res pon si ble for the imp leme ntati on of nation alpol icies relat ing to RE and EE and de sire s to ac celer at e the adopt ion of RE and EE init iativesin the co untr y and the pro visio n of hig h qua lity po we r whe re re qui red. The cur rentenv iro nm ent of ris ing energ y prices world wide make s it critic al for loc al indust ries and servic eprov ide rs to ad op t the se ini tiatives to ma int ain bus ine ss comp et iti ven es s inc ent ives gran te d inc lud e: Pione er Stat us (PS) , Inv es tment Tax Al lowa nc e (ITA), and Exem pt ion from pa yme nt of Impo rt Dut y and /o r Sa les Ta x on ma chi ne ry, equip ment,ma te rials , spa re pa rts and consuma doc um ent do es no t addre ss fis cal inc ent ive s for the transpo rt se ct e: Fis cal ince nt ives appl y only to bus ine ss ent ities classifi ed as Sya ri kat Sdn.

8 Bhd. orSyar ikat Bhd .Pu rpose of HandbookTh is handbookprovi des info rm at ion on fis cal incent ives pr ovide d by the Go ve rnm ent for thegene ra tio n of RE an d ado pt ion of EE ini ti ati ve s. The ha ndbo ok also out line s the appl icati onand approva l process es and th e Gove rnme nt age nc ies re spons ible for proce ssi ng an dap pro ving the inc en e handbook is de signed for the ben efi t of en er gy pr od ucer s an d user s in the indus trial an dco mmercia l secto rs . The cont en ts of th is ha nd boo k appl y to the se pro duc er s and use rswhet her the y are con nec ted to th e nat ion al elec tricity supp ly netw ork or opera te un der s tand -alon e (o r off -g ri d) env iro nment .De fin iti on sTer mDe fini tionRe new ab leRen ew abl e Ene rg y is any form of prima ry ene rgy fro m rec urr ingEne rgy (RE )an d non-d epl et ing re sourc es, such as agri cul tura l produce,hy dro -po we r, wind, solar rgyEne rgy Effic ienc y is the effic ient use of ene rgy in a mann er tha tEfficie ncy (E E)ut ilises les s ene rg y for pro duci ng the sa me out put.

9 AbbreviationsAAAnnualAllowanceAIAdjusted IncomeCACapitalAllowanceDSMD emandSide ManagementECEnergyConservationEE/ECEnerg yEfficiency/ EnergyConservationEPCE nergyPerformanceContractESCOE nergyServiceCompanyGCGrid ConnectedHEMHigh EfficiencyMotorsIAInitial AllowanceI-DImportDutyIECI nternationalElectrotechnicalCommissionIT AI nvestmentTax AllowanceKDRMK astamDiraja MalaysiaMEGTWM inistryof Energy,GreenTechnologyand WaterLHDNL embagaHasil DalamNegeriMIDAM alaysianIndustrialDevelopmentAuthorityMO FM inistryof FinanceMSMalaysianStandardPIAP romotionof InvestmentsAct 1986 POMEPalm Oil Mill EffluentPSPioneerStatusPTMP usat TenagaMalaysiaPQPowerQualityQCEQ ualifyingCapitalExpenditureRERenewableEn ergyREEEFR enewableEnergy& EnergyEfficiencyFundRMRinggitMalaysiaSAS tand AloneSIStatutoryIncomeSREPS mall RenewableEnergyPowerSTSuruhanjayaTenagaS -TSales taxTPDT hird Party Distributors476 TermDefi nitio nPi one er St at us (PS) A fisc al inc en tiv e grantedunder th e Promo ti on of InvestmentsAct (PI A) 1986 to com pa nie s proposing to generat e RE orun dert ake EE init iat ive s.

10 Th e inc entiv e is in th e fo rm of fu llincom e tax exe mption on sta tu tory inco me genera te d fro m REbu sine ss and EE proje ct s for 10 tment TaxA fisc al inc en tiv e grantedunder th e Promo ti on of InvestmentsAl lowan ce (ITA )Act (PI A) 1986 to companiesproposing to gene ra te RE orun dert ake EE init iat ive s. Th e inc entiv e is in th e fo rm of a taxallowa nc e of 100% on qu alify ing capita l ex pen dit ure inc urredwit hin 5 ye ars from the date the firs t qu alif ying ca pitalex pe nd itu re is inc urr ed. Compa nie s ca n us e this allow anc e tooff set again st 100% of th eir st at utory inc ome in the yea r ofas ses sm en t. Any unu tilis ed allow an ce can be carrie d fo rwar d tosu bse que nt yea rs un til the whole amou nt is fully utili se t DutyA ta riff imposed on productsth at are impo rt ed int o coun try . Theta x rate s va ry ac cordingto the type s of pro duct s and the originof import.