Automation Capital Allowance (ACA) is a tax incentive introduced by the Malaysian government to encourage businesses to adopt automation and modern technology in their operations. It is part of national efforts to improve productivity, efficiency, and competitiveness across the manufacturing and services sectors.
Under ACA, eligible businesses can claim a 200% capital allowance on the first RM10 million of qualifying expenditure related to automation and technology investments. This allows companies to deduct more than double the actual cost from their taxable income, significantly reducing tax payable.
To qualify, the equipment or system must include at least one Industry 4.0 element, such as:
- Internet of Things (IoT)
- Artificial Intelligence (AI)
- Big data analytics
- Cloud computing
- Autonomous robots
- Other advanced digital technologies
To be eligible, a company must:
- Be incorporated in Malaysia under the Companies Act
- Have been operating for at least 36 months
- Be involved in manufacturing or services that benefit directly from automation
- Invest in qualifying automation machinery, systems, or software
- Undergo technical verification (for example, by SIRIM) and evaluation by MIDA
*The incentive applies to qualifying investments made from 2023 until 31 December 2027.
Based on the official guidelines, businesses must meet certain usage conditions to qualify for ACA:
- For existing products or services, the automation machinery, equipment, software, or Industry 4.0 system must be used for at least one (1) month after installation or commissioning.
- For new products or services, the system must be in operation for at least three (3) months after the first batch is produced or services begin.
- Companies must also invest in at least one (1) automation machine, system, or software that includes an Industry 4.0 element, within the maximum eligible amount of RM10 million.
These requirements ensure the automation is actively used and supports real productivity improvements.
- Lower Tax Burden
With a 200% capital allowance, businesses can reduce taxable profits more quickly, improving cash flow and freeing up capital for growth.
- Higher Productivity
Automation reduces reliance on manual processes, improves consistency, and increases output efficiency across operations.
- Improved Competitiveness
Adopting Industry 4.0 technologies helps businesses stay competitive locally and globally while preparing for long-term digital transformation.
Many Malaysian companies that have adopted automation through ACA have seen improvements in output quality, operational efficiency, and workforce optimisation.
While ACA supports automation investment, the real value comes from implementing the right automation solutions. Mirai Industrial Automation focuses on helping businesses improve productivity, efficiency, and operational performance through practical automation.
We support businesses by:
- Analysing existing workflows to identify automation opportunities
- Designing and integrating automation systems that reduce manual work
- Implementing smart manufacturing and industrial automation solutions
- Improving process efficiency, consistency, and output quality
- Supporting long-term productivity growth through scalable automation
Whether you are automating a single process or transforming an entire operation, Mirai helps businesses work faster, smarter, and more efficiently through automation.
Talk to Mirai today and take the next step towards a more efficient, automated operation!