Tax Deduction for MTCS/PEFC Certification

The Malaysian Timber Certification Council (MTCC) wishes to inform that companies certified under the Malaysian Timber Certification Scheme (MTCS), endorsed by the Programme for the Endorsement of Forest Certification (PEFC), may be eligible for tax deductions under incentives provided by the Inland Revenue Board of Malaysia (LHDN) pursuant to the Income Tax Act 1967.

Eligibility

The incentive is eligible for Malaysian companies that:

  1. Obtain MTCS/PEFC Chain of Custody (COC) certification / Forest Management (FM) certification
  2. Maintain or renew their MTCS/PEFC COC / FM certification

Companies must incur expenses related to audit certification activities conducted by a certification body accredited by the Department of Standards Malaysia (DSM). Certification bodies accredited by DSM for the purpose of issuing certifications under DSM, include the following programmes:

  1. Product Certification Programme (PC)
  2. Forest Management Certification Programme (FMC)

Claiming the Tax Deduction

    1. Obtaining MTCS/PEFC Chain of Custody (COC) certification / Forest Management (FM) certification

    Double Tax Deduction – Paragraph 34(6)(ma), Income Tax Act 1967

    Expenses incurred by a company for the purpose of obtaining MTCS/PEFC certification, are eligible for a double tax deduction provided the certification is issued by an accredited Certification Body under Paragraph 34(6)(ma).

    Expenses that may qualify for double tax deduction include: 

    • Application fee
    • Annual fee (for the first year only)
    • Assessment fee
    • Other fees imposed by the Certification Body for obtaining the certification

    1. Maintaining or renewing their MTCS/PEFC COC / FM certification

    Single Tax Deduction – Section 33(1), Income Tax Act 1967

    After the MTCS/PEFC certification has been obtained, any fees charged by the Certification Body in subsequent years are eligible only for a single tax deduction under Section 33(1).

    Expenses that may qualify for Single Tax Deduction include: 

    • Annual surveillance fee
    • Annual renewal fee
    • Reassessment fee
    • Other fees imposed by the Certification Body for maintaining the certification

    Reference: GARIS PANDUAN; POTONGAN PERBELANJAAN DI BAWAH PERENGGAN 34(6)(m) DAN 34(6)(ma) AKTA CUKAI PENDAPATAN 1967 BAGI MAKSUD PENGIRAAN CUKAI PENDAPATAN

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    MTCS Tax Deduction 2026Download

    Publish Date: 12 May 2026

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