August 17, 2018
Malaysian Lower House passes Sales and Service Tax legislation
Following the reduction of the standard rate for Goods and Services Tax (GST) from 6% to 0%1 and the planned introduction of the Sales Tax and Service Tax (SST) on 1 September 2018, the Lower House of the Malaysian Parliament has passed the SST bills and the GST revocation bill. The bills are currently being debated in the Senate.
This Alert summarizes the SST legislation.
The proposed SST bills are largely similar to the legislation in place prior to the introduction of GST. This will be a positive development for businesses familiar with the taxes, particularly those required to be registered, to collect and pay, as in theory, this should make the short implementation period more manageable.
Based on the information released by the Royal Malaysian Customs Department (RMCD), the key points of the SST are:
MySST portal is now assessable at https://mysst.customs.gov.my. Current GST registrants are able to check their SST registration on the MySST portal by providing the following information/details:
The list of proposed taxable services includes a general comparison between the taxable services under the previous Service Tax legislation (which was in effect from 1975 to March 2015) and the taxable services proposed under the new Service Tax regime. There is also additional clarification on the scope of service providers and the taxable services which will fall under the ambit of the new Service Tax regime.
The key highlights include:
It is important to note that for services relating to goods or land outside Malaysia, the same would generally be treated as non-taxable services, subject to conditions which may otherwise be prescribed.
To access the abovementioned list, click on the list below:
1 See EY Global Indirect Tax Alert, Malaysia imposes zero-rated GST effective 1 June 2018, dated 21 May 2018.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Tax Consultants Sdn Bhd, Kuala Lumpur
Ernst & Young LLP, Malaysian Tax Desk, New York
Ernst & Young LLP, Asia Pacific Business Group, New York
PDF version of this Tax Alert