Automation Capital Allowance vs GITA vs EACG: 2026 Guide

Two clocks are running, and they are not synchronised. GITA 2.0 and GTFS 5.0 both close on 31 December 2026. The Automation Capital Allowance runs a full year longer, to 31 December 2027. If you are planning energy or automation capex, that asymmetry should decide which projects you push first.

This guide compares the Automation Capital Allowance, GITA, the EACG audit grant and GTFS 5.0. It also answers the question almost nobody checks until it is too late: can you stack them? Everything here is current as of 7 July 2026. Budget 2027, expected in October, could extend the GITA deadline; nothing had been announced when we wrote this.

Which incentive fits which project? The short answer

Match the project type first, then check the deadline.

- Production line automation, robots, Industry 4.0 systems: Automation Capital Allowance. 200% deduction, window open until 31 December 2027.
- MyHIJAU-listed energy-efficient hardware (chillers, air compressors, boilers, VSD-equipped systems): GITA Asset Tier 2 at 60%. Capex must land by 31 December 2026.
- Solar, BESS or EV charging for own use: GITA Asset Tier 1 at 100% (BESS, EV assets) or GITA Project for revenue-generating RE. Same 2026 deadline. GITA Project requires you to apply to MIDA before incurring capex.
- You do not know where your energy waste is yet: start with an EACG-funded energy audit, then fund the resulting measures with GITA or Automation CA.
- Financing is the bottleneck: GTFS 5.0 guarantees 60% to 80% of the bank loan. It is not a tax incentive, so it layers on top of any of the above.

What does the Automation Capital Allowance actually give you?

A 200% capital allowance on the first RM10 million of qualifying automation capex. It covers expenditure incurred within YA 2023 to YA 2027, for both manufacturing and services companies. The old RM4 million and RM2 million category caps were merged into one RM10 million limit, per the MIDA guideline.

You apply online through MIDA's InvestMalaysia portal; applications are accepted until 31 December 2027. Evaluation is joint. MIDA screens the company (tax resident, at least 36 months in operation, Manufacturing Licence where applicable). SIRIM does a paid site visit and must verify a productivity gain: reduced man-hours, fewer operators, a lower defect rate, or higher output.

Machinery, equipment, software and systems qualify if they adopt at least one of 11 Industry 4.0 pillars. Examples include IoT, AI, big data analytics and autonomous robots. Standard office software and like-for-like replacements are excluded. Whether a monitoring or analytics platform qualifies is decided case by case at SIRIM verification, so do not assume software eligibility; ask MIDA first.

What does GITA 2.0 cover, and why is its clock tighter?

GITA Asset gives an allowance of 100% of qualifying capex for Tier 1 assets (BESS, EV assets, green building assets). Tier 2 assets, a specific list of energy-efficiency and renewable-energy hardware, get 60%. The allowance is set off against 70% of statutory income, and unabsorbed amounts carry forward. Qualifying capex must be incurred between 1 January 2024 and 31 December 2026, per the MGTC guideline.

Read the Tier 2 list before you plan around it. It is hardware only: chillers, cooling towers, air compressors, heat recovery, boilers, thermal storage, VAV and VRV systems, plus own-consumption RE. Energy management software is not on it. The asset must be new, MyHIJAU-listed, and used for your own consumption.

Process discipline matters. You apply to MGTC within 24 months of incurring the capex, and only after commissioning. You cannot claim with LHDN until MGTC issues its verification letter. Processing fees run from RM2,500 to RM10,000 depending on asset cost.

Budget 2026 also announced a 100% GITA for locally manufactured certified green technology products. The effective date is "to be determined", and no guidelines had been sighted as of July 2026, per BDO's Budget 2026 summary. Announced, not claimable.

Where does the EACG fit?

The Energy Audit Conditional Grant pays for the audit that tells you what to fix. SEDA has opened the RMK-13 round for 2026, first come, first served, for commercial and industrial sites using at least 100,000 kWh per month. Under the previous RMK-12 round the caps were RM100,000 per industrial site and RM60,000 per commercial site. SEDA had not published readable 2026 caps when we checked, so confirm before budgeting.

The string attached is real. You must implement the recommended measures within 3 years, spend at least the grant amount doing so, and hit minimum savings targets. Miss those conditions and you refund the grant. Treat the EACG as the scoping phase of a committed programme, not as free money.

Why does GTFS 5.0 stack with everything?

Because it is a guarantee, not a tax break. GTFS 5.0 backs 60% to 80% of your green-project bank financing at a 0.40% annual guarantee fee. The scheme has a RM1 billion allocation and runs until 31 December 2026, or until the allocation is used up. Unlike earlier rounds there is no interest rebate.

The grant-offset rules in the tax incentives apply to grants, not guaranteed loans. A GTFS-financed asset can still claim GITA or Automation CA in full.

Can you stack the Automation Capital Allowance with GITA?

On the same asset: no, never. Pick one.

Same company, different assets, same year of assessment: this is the trap. The gazetted Automation CA Rules, quoted in the MIDA guideline, exclude companies that hold certain other incentives in the same YA. The exclusions cover Reinvestment Allowance, Promotion of Investments Act incentives, and exemptions granted under s.127(3)(b) or s.127(3A) of the Income Tax Act 1967. They apply per YA at company level.

MGTC's GITA guideline lists what may sit alongside GITA Asset in the same basis period, and Automation CA is not on that list.

The previous GITA scheme was granted under s.127(3)(b). We could not conclusively verify that the current 2024–2026 round uses the same legal mechanism, so we will not say same-year stacking is definitely blocked. The safe plan: claim in different YAs, or get written confirmation from MIDA, MGTC and your tax adviser before committing to both in one year.

Grants are cleaner: equipment part-funded by a government grant can still claim Automation CA on the un-granted portion. An EACG-funded audit does not poison the follow-on equipment claim.

Worked example: RM1 million of line automation and monitoring

Assume Malaysia's 24% corporate tax rate and enough profit to absorb the claim.

Under the Automation Capital Allowance:

- Qualifying capex: RM1,000,000
- Deduction at 200%: RM2,000,000
- Tax shield at 24%: RM480,000
- After-tax cost: RM520,000

Under GITA Tier 2 (if the asset were MyHIJAU-listed EE hardware instead):

- GITA at 60%: RM600,000, worth RM144,000 in tax
- Normal capital allowances on the RM1 million: about RM240,000 over the claim period
- Total shield: RM384,000
- After-tax cost: RM616,000

With no incentive, ordinary capital allowances alone leave an after-tax cost of RM760,000.

Two caveats. The GITA figures assume you also claim normal Schedule 3 capital allowances on the same asset. Tax firms present GITA this way, but the MGTC guideline does not spell it out, so confirm with your adviser. And GITA is restricted to 70% of statutory income each year, so in a low-profit year the RM144,000 arrives over several years, not one.

Whichever route you pick, it becomes a measurement problem

SIRIM will not sign off an Automation CA claim on a purchase order. It verifies productivity: man-hours, operator counts, defect rates, output. Those are the numbers an OEE programme already tracks.

EACG recipients must prove percentage savings within 3 years, a measurement and verification exercise. GITA claims need commissioning and performance evidence for MGTC.

Under TNB's RP4 tariff, medium-voltage commercial sites pay RM89.27 and RM97.06 per kW each month in capacity and network charges. A funded project that trims peak demand therefore pays back on two fronts. CobiNeural's monitoring, Max Demand KPI and Plan & Verify M&V module build that before-and-after evidence trail. MIDA, SIRIM and SEDA all eventually ask for it.

Lining up a 2026 or 2027 claim? Get the baseline data in place before the equipment lands: book a demo and we will show you what the evidence trail looks like.