Tax Bulletin | UPDATES ON INDIRECT TAX: Sales Tax and Service Tax

We would like to inform that the Royal Malaysian Customs Department (RMCD) has uploaded the following in the website, MySST recently:-

Date of Publication	Subject		Salient Points
13 August 2020	Service Tax Policy	The RMCD has published the following service tax policies:-
		1) Service Tax Policy No. 1/2020 (Amendment No. 1) [click HERE] – Expansion of scope of taxable service.	This is to highlight that the taxable service under item (m), Group G, First Schedule of the Service Tax Regulations 2018 (“STR”) namely provision of digital services including transaction for provision of digital services on behalf of any person is deleted and added into item (l) of the STR, as follows: New item (l) – provision of digital services including provision of electronic medium that allows the suppliers to provide supplies to customers or transaction for provision of digital services on behalf of any person, excluding provision of such services in relation to matters outside Malaysia.
		2) Service Tax Policy No. 3/2020 (Amendment No. 1) [click HERE] – Claiming a refund by offsetting method on service tax on imported digital service provided by foreign registered person.	This is to amend the technical term “Foreign Service Provider (FSP)” with “Foreign Registered Person (FRP)” that used on service acquired from a foreign vendor who is registered and charging service tax to its customers in Malaysia.
		3) Service Tax Policy No. 4/2020 (Amendment No. 1) [click HERE] – Service Tax on online distance learning services.	Service Tax Policies No. 4/2020 & 5/2020 – These services provided by both foreign and local service providers are given the concession for the services to be excluded from service tax.
		4) Service Tax Policy No. 5/2020 (Amendment No. 1) [click HERE] – Service Tax on online newspaper, online journals and periodicals.
		5) Service Tax Policy No. 8/2020 (Amendment No. 1) [click HERE] – Group relief facility on provision of taxable services to company within the same group of companies.	This is amended to include digital service under item (l), Group G, First Schedule of the STR as a service that is eligible for intragroup relief.
	Specific and Industry Guides	The RMCD has published the following guides:-
24 August 2020		1) GST Guide on Declaration and Adjustment after 1 September 2018 dated 18 August 2020 [click HERE].	This Guide is to replace the GST Guide on Declaration and Adjustment after 1st September 2018 dated on 8 May 2019.
17 September 2020		2) Guide on Service Tax Treatment on Disbursement and Reimbursement dated 15 September 2020 [click HERE].	To provide guidelines on how to apply service tax rules between “Disbursement” and “Reimbursement”.
17 September 2020		3) Guide on Service Tax Treatment on Consultancy, Coaching and Training Services dated 15 September 2020 [available in Malay language only click HERE].	To provide guidelines on scope of Consultancy, Coaching and Training Services that fall under taxable services.
5 October 2020		4) Guide on Service Tax Treatment on Management Services dated 1 October 2020 [available in Malay language only click HERE].	To provide the scope of management services that fall under taxable services: 1) Project management services, full or part of the project. 2) Tourism management services – removed as a taxable service from 1 September 2019. 3) Logistics management services – removed as a taxable service from 1 September 2019 4) Maintenance management services 5) Warehousing management services – Further explained in the Warehousing Guide below. 6) Collection and debt management services 7) Car park management services 8) Sports facilities management services 9) Secretarial management services 10) Any management services other than specified above, made on behalf or another person.
7 October 2020		5) Guide on Service Tax Treatment on Warehousing Management Services dated 6 October 2020 [available in Malay language only click HERE].	To provide guidelines on warehouse operator and the scope of warehousing management services. This includes services such as: 1) Handling 2) Loading and unloading 3) Sorting 4) Consolidation and de-consolidation 5) Labelling 6) Inventory control 7) Storage space 8) Pick and pack 9) Security control Note: Transportation of goods is excluded from the scope of warehousing management services.
7 October 2020		6) Guide on Service Tax Treatment on Professional Services dated 6 October 2020 [click HERE].	To provide guides on digital services that fall under Professional Services Group G, First Schedule of the STR.
7 October 2020	General Guide	General Guide on Service Tax dated 6 October 2020 [available in Malay language only click HERE].	This Guide is to replace the General Guide on Service Tax dated on 7 September 2018.
7 October 2020	Sales Tax	Sales Tax (Person Exempted from Payment of Tax) (Amendment) (No. 2) Order 2020 [click HERE]​​​​​​​

 

We will keep you updated on any further guidelines and announcements to be issued by the Royal Malaysian Customs Department or other relevant authorities, if any.