Malaysia Digital Tax Incentive

What is Malaysia Digital (MD) Tax Incentive?

MD Tax Incentive is a new outcome-based tax incentive scheme offered to eligible MD companies that undertake activity utilising any of the MD promoted tech enablers.

The outcome-based approach uses a tiered system in granting tax incentives, to encourage companies to spur the economy through investments in high-growth high-value areas and to create new economic clusters, expand domestic network, and provide balance between economic growth and environmental, social and governance sustainability.

This incentive scheme is designed to align with the international standards set by the Organisation for Economic Co-operation and Development (OECD).

What are the types of tax incentive offered?

New Investment Incentive

Expansion Incentive

Reduced Tax Rate (RTR)


on qualifying intellectual property (IP) income


5% OR 10%

on qualifying non-IP income for up to 10 years


Investment Tax Allowance (ITA)

60% OR 100%

of qualifying capital expenditure against up to 100% statutory income for up to 5 years

Eligibility Criteria

To be eligible to apply for the New Investment Incentive, the applicant must be a company which:

  1. is incorporated or deemed to be registered under the Companies Act 2016 and resident in Malaysia
  2. has a minimum paid up capital of RM50,000.00
  3. has made an application for the award of MD Status
  4. is proposing to undertake the qualifying activity in Malaysia
  5. has not issued any sales invoice for the qualifying activity in Malaysia prior to the date the tax incentive application is received, or has sixty per cent direct or indirect Malaysian equity ownership and has not issued any sales invoice for the qualifying activity in Malaysia more than twelve months prior to the date the tax incentive application is received
  6. is not granted any tax incentive by the Government of Malaysia in relation to the qualifying activity.

MD Promoted Tech Enablers

The outcome-based tax incentive is offered to eligible MD companies who undertake qualifying activities by leveraging any of the following promoted tech enablers:


Artificial Intelligence & Big Data Analytics








Drone Technology


Internet of Things


Robotic and/or Automation


Creative Media Technology including extended reality (XR) and/or mixed reality (MR)


Integrated Circuit (IC) Design with Embedded Software


Advanced network connectivity and/or telecommunication technology

Application Process

Apply for Malaysia Digital (MD) Status

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Contact Us

If you do have any enquiries, please don’t hesitate to reach us.