Sales Tax

Service Tax

Taxable: Manufactured in or Imported into Malaysia

* Manufacture:

· Changing the size, shape, composition, properties or quality of the material

· Installation of tools and components into machines or equipment

· Changing the quality of finished goods

· In relation to petroleum, any process of separation, purification, conversion, refining and blending

Taxable Service Including:

· Accommodation

· Advertising Services

· Betting and Gaming

· Broking and Underwriting Services

· Clubs

· Courier Services

· Customs Agents Services

· Domestic Flight

· Electricity

· Food & Beverages

· Hire Passenger Vehicles Services

· Information Technology Services

· Motor Vehicle Services or Repair Centre

· Paid Television Broadcasting Services

· Parking Services

· Professional Services

· Telecommunication Services

Threshold: RM500,000.00

Rate: 5% or 10%

Submission Cycle: Bi-monthly

* To submit not later than the last day of the following month after the taxable period ended regardless there is any tax to be paid or not

Threshold: RM500,000.00

*except Restaurant RM1,500,000.00 and Credit Card or Charge Card and Custom Agent no threshold

Rate: 6%, A specific rate of tax of RM 25 is imposed upon issuance of principal or supplementary card and every subsequent year or part thereof

Submission Cycle: Bi-monthly

* To submit not later than the last day of the following month after the taxable period ended regardless there is any tax to be paid or not

Penalty:

10% - first 30 days period
15% - second 30 days period
15% - third 30 days period
Maximum penalty 40% after 90 days

Penalty:

10% - first 30 days period
15% - second 30 days period
15% - third 30 days period
Maximum penalty 40% after 90 days

Account on Payment Basis

Contra system: Can deduct service tax for any cancellation and termination of services or any other reasons such as reducing premiums or discounts

The recovery of cost or a payment made by registered person on behalf of another party is termed as a “disbursement” and is NOT subject to Service Tax

A reimbursement is subject to Service Tax

The invoice must contain prescribed particulars:

   i.     The invoice serial number;

  ii.     The date of the invoice;

 iii.     The name, address and identification number of the registered manufacturer;

 iv.     The name and address of the person to whom the taxable goods is sold

  v.     Quantity and description of the goods;

 vi.     Any discount offered;

vii.     For each description, distinguish the type of goods, quantity and amount payable excluding tax;

viii.     The total amount payable excluding tax, the rate of tax and the total tax chargeable to be shown as a separate amount or a total amount payable inclusive of total of tax chargeable; and

 ix.     Any amount expressed in a currency other than Ringgit shall also be expressed in Ringgit at the selling rate of exchange prevailing in Malaysia at the time of manufacturing

The invoice must contain prescribed particulars:

   i.     The invoice serial number;

  ii.     The date of the invoice;

 iii.     The name, address and identification number of the registered person;

 iv.     A description sufficient to identify the taxable services are provided;

  v.     Any discount offered;

 vi.     The total amount payable excluding service tax, the rate of service tax and the total service tax chargeable shown as a separate amount;

vii.     The total amount payable inclusive of total chargeable;

viii.     Any amount referred to in a currency other than the ringgit shall also be expressed in ringgit at the selling rate of exchange prevailing in Malaysia at the time of the taxable service is provided; and

 ix.     It must be in the national language or English

Branch Registration: Not Allowed

Group Registration: Not Allowed

Branch Registration: Allowed

Group Registration: Not Allowed

Can adjust Sales Tax return by applying to the Director General

Keep soft or hard copy records in BM or English for 7 years

Can claim bad debts:

a.      Within 6 years from the date the taxable goods is sold;

b.      Subject to conditions determined by the Director General;

c.      According to a prescribed formula:

Payment Received                * Tax Payable
Total Amount Including Tax

Can claim bad debts:

a.     Within 6 years from the date the taxable goods is sold;

b.    Subject to conditions determined by the Director General;

c.     According to a prescribed formula:

Payment Received                * Tax Payable
Total Amount Including Tax

Can claim overpaid or erroneously paid amount within ONE year

Can drawback of sales tax paid in respect of goods which are subsequently exported except petroleum within 6 months from purchase and 3 months from export except petroleum