MDEC’s Malaysia Digital tax incentive application for digital businesses is now open

KUALA LUMPUR (June 4): The Malaysia Digital Economy Corp (MDEC) is now accepting applications for the new Malaysia Digital (MD) tax incentive program from eligible MD companies that leverage technology tools such as artificial intelligence (AI), cybersecurity and blockchain and advanced network connectivity.

“Eligible MD companies can benefit from a competitive reduced corporate tax rate on both intellectual property (IP) and non-IP income, in addition to an investment tax deduction (ITA) for capital-intensive service activities,” MDEC, a government agency under the purview of That reports Ministry of Digital Affairs said in a statement on Tuesday.

The MD tax scheme, which is supported by the Digital Ministry and the Ministry of Finance (MOF), offers tax benefits to eligible companies in two categories, namely new investments and expansion.

The new investment category can enjoy a reduced tax rate of 0% on IP income, and 5% or 10% on non-IP income for 10 years, while companies under the expansion category can enjoy a reduced tax rate of 15% for five years .

Alternatively, companies in both categories can opt for ITA between 30% and 100% on capital expenditure on eligible activities, which can be offset against up to 100% of statutory income for five years.

MDEC CEO Mahadhir Aziz sees the MD tax incentive as a game-changer to strengthen Malaysia’s position as Asean’s digital hub and align with current economic needs and international best practices.

“By attracting global talent and investments in high-growth sectors, we aim to create a thriving digital ecosystem, generate high-quality jobs, boost R&D (research and development) activities and integrate cutting-edge technologies locally,” Mahadhir said.

As of April 30, the number of award-winning MD companies has surpassed 5,000, underscoring the role of the MD initiative in digital innovation across sectors and supporting Malaysia’s transformation plans as outlined in both the Madani Economy framework and the New Industrial Master Plan 2030 (NIMP 2030). .