IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Outflow (subsidised)

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 01 Jan 2010 | Removal date: open ended
Still in force

Tax-based export incentive

On 29 October 2009, the government of Malaysia announced the results for the review of the National Auto Policy (NAP). While tariff levels for imports of vehicles and their components will be maintained at current levels, the following announced measures have trade implications.
 

  • Manufacturing licences. Under the new NAP, additional manufacturing licences will be granted for luxury, hybrid and electric vehicles as well as pick-up trucks and certain motor cycles. Foreign companies may thus start and fully own production facilities for the mentioned vehicles in Malaysia.
  • Tax exemption of exported goods. Goods that fulfill certain value added criteria qualify for exemption from statutory income tax of up to 50 percent.
  • Used parts and components. The government plans to implement a mechanism that shall prohibit imports of used parts and components from June 2011.
  • Used passenger and commercial vehicles, motorcycles. The government plans to prohibit imports of used commercial vehicles from 1 January 2016.
  • Import licences for passenger vehicles. From 1 January 2010, the government plans to impose a fee of RM 10'000 (ca. USD 2921) for every issued import licence.
  • Manufacturing of specific components for hybrid or electric vehicles are eligible for a 100% Pioneer Status (a preferential tax scheme) for ten year or 100% Investment Tax Allowance for five years
  • Companies investing in the assembly or manufacturing of hybrid and electric vehicles will be eligible for 100% Investment Tax Allowance or Pioneer Status for ten years
  • Additional grants for specific R&D and training are allocated

 
According to consistent press reports, the Malaysian government has imposed an import licensing scheme for passenger vehicles. Also, import ban for used car parts and components is to come into effect as planned on 1 June 2011. The first products are reported to be brake linings, brake pads, tyres and batteries.
 
The National Automotive Policy was again amended in 2014. Please see related measure.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

491 Motor vehicles, trailers & semi-trailers; parts
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.
870322 Of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc
870323 Of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc
8708 Parts and accessories of the motor vehicles of headings 87.01 to 87.05.
870810 Bumpers and parts thereof
870830 Brakes and servobrakes; parts thereof
870850 Driveaxles with differential, whether or not provided with other transmission components, and nondriving axles; parts thereof
870870 Road wheels and parts and accessories thereof
870880 Suspension systems and parts thereof (including shock absorbers)
870891 Radiators and parts thereof
870892 Silencers (mufflers) and exhaust pipes; parts thereof
870894 Steering wheels, steering columns and steering boxes; parts thereof
870899 Other
492 Motor vehicle bodies; trailers & parts thereof
8708 Parts and accessories of the motor vehicles of headings 87.01 to 87.05.
870829 Other
499 Other transport equipment & parts
8711 Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without sidecars; sidecars.
871120 With reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc

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