Dear Valued Clients,
Welcome to our E-Newsletter September 2018
Hope this email finds you well!
As National Day nears, the Merdeka spirit is in the air. Over the past few months, Malaysia has seen a huge transition in political power, hence the coming National Day carries significant meaning to all Malaysians – it symbolises new hope and new chapter of the country. Other than the political shift of power, Malaysia has also seen some economic growth. Economists predicted that Malaysian economy will see an expected growth between 5.2% to 5.8% in the second quarter of the year. According to the MIDF Research, Malaysia’s economy can expect a 5.8% expansion, which would be led mainly by the domestic sector and solid labour market.
Apart from the economic performance, I would like to highlight some changes in the tax environment of Malaysia.
SST: the new tax regime commencing on September 1, 2018
Everyone in Malaysia knows that the Sales and Services Tax (SST) will take effect on 1 September 2018. Indeed, the re-introduction of SST in the country has caused a huge ripple in the pond – from the registration process, return submission and payment of the SST and the transitional measures to take after the scrapping of the GST.
Below are some key takeaways on how the SST works:
- a. The SST is a single-stage tax, meaning the tax will be levied where the sales ad valorem tax is levied upon
- I. taxable goods manufactured and sold by a taxable person in Malaysia and,
- II. taxable goods imported into Malaysia.
- b. Service tax is levied on taxable services in Malaysia but not on imported or exported services;
- c. Taxable persons refer to
- I. manufacturers of taxable goods or providers of taxable services with annual turnover exceeding MYR 500,000.
- II. a person who offers taxable services (for example hotel, insurance, club, gaming, telecommunication, legal, accounting, architectural, security, etc) in Malaysia and the service is liable to be registered or is registered under the Service Tax Act 2018;
- d. Sales tax will be charged at the rate of 5%, 10% or a specific rate for petroleum products while the service tax will be levied at the rate of 6%.
- e. It is mandatory requirement that SST returns must be submitted to Royal Malaysian Customs Department (“RMCD”)on a bi-monthly basis.
- f. registered persons are mandated to safe keep records of SST submissions for a period of 7 years.
As Malaysia celebrates its 61st birthday, unity, strength and resilience are the important elements as we enter an era of new challenges. Malaysia’s potential for forging a brighter future for the young generation is tremendous. We, as part of Malaysia, are doing our best to help companies to forge their business future in this fast-changing era. I wish you all the best in the coming months, and Happy National Day to all of you.
Read More in our E-Newsletter September 2018.