Commercial Property More Than RM2 Million have to Registered for GST in Malaysia
Custom Malaysia has updated silently the DG’s Decision 4/2014 Item 6 and the amendments were effective from 28 October 2015. This DG’s decision clarifies the GST treatments for Individual supplies commercial properties i.e. whether an individual has to charge GST when making a supply of his commercial property?
What the implications from the amendments?
Based on the previous DG’s Decision, any individual person is considered as carrying out business if make a supply of more than two commercial properties or commercial land exceeding 1 acre and is liable to register with GST if his total annual taxable supply exceeds RM500,000.
So long as you supply less than three commercial properties or commercial land not exceeding 1 acre, it would be treated as not carrying out business even if the sale is more than RM500,000 in a 12 months period.
However, the above mentioned amendments added one more criteria (i.e. commercial property or commercial land worth more than RM 2 million ringgit at market price) to determine when a person is considered as carrying out business of supply of commercial property.
Any individual that supplies commercial property or commercial land worth more than 2 million ringgit at market price after 28 October 2015 shall liable to register for GST. Any late registration will be subject to penalty based on number of days late which capped at RM20,000.
Late Registration Period (Days) | Cumulative (RM) |
1 – 30 | 1,500 |
31 – 60 | 3,000 |
61 – 90 | 4,500 |
91 – 120 | 6,000 |
121 – 150 | 7,500 |
151 – 180 | 9,000 |
181 – 210 | 10,500 |
211 – 240 | 12,000 |
241 – 270 | 13,500 |
271 – 300 | 15,000 |
301 – 330 | 16,500 |
331 – 360 | 18,000 |
Exceeding 360 | 20,000 |
Please refer below on the full contents of original and amended DG’s Decision 4/2014 Item 6
Original DG’s Decision 4/2014
- GST shall be charged by a taxable person in the course or furtherance of business on any taxable supply of goods or services made in Malaysia (section 9 GSTA).
- Taxable person means any person who is or is liable to be registered under the GSTA (section 2 GSTA). A person is liable to be registered if his total taxable supply of the current month and the next eleven months exceeds RM500,000.
- Any individual owning commercial property at any one time –
- make a supply of two commercial properties or commercial land not exceeding 1 acre would be treated as not carrying out business even if the sale is more than RM500,000 in a 12 months period;
- would also be treated as not carrying out business if there is no intention of making a supply;
- make a supply of rental services on such property is liable to be registered when the turnover for such supply exceeded the threshold amount of RM500,000.
DG decision 4/2014 (amended 28 October 2015)
Source to click here.
- GST shall be charged by a taxable person in the course or furtherance of business on any taxable supply of goods or services made in Malaysia (section 9 GSTA).
- Taxable person means any person who is or is liable to be registered under section 2 GSTA. A person is liable to be registered if his total taxable supply of the current month and the next eleven months exceeds RM500,000.
- Any individual who is not a GST registered person is treated as carrying out a business if he at any one time owns – (wef 28/10/2015)
- more than 2 commercial properties;
- more than one acre of commercial land; OR
- commercial property or commercial land worth more than 2 million ringgit at market price;
- Any individual mentioned in paragraph (3) is liable to be registered as a GST registered person if – (wef 28/10/2015)
- he has the intention to supply any of his commercial properties or commercial land; AND
- the total value of such supply exceeds the prescribed threshold in 12 months periods.
- ‘at any one time’ mentioned in paragraph (3) means at any point of time in his lifetime commencing after the effective date. (wef 28/10/2015)
- Any individual is treated as carrying out a business and making a supply of taxable service if: (wef 28/10/2015)
- he is supplying any lease, tenancy, easement, licence to occupy or rent ; AND
- his annual turnover for such supply has exceeded the prescribed threshold in the period of 12 months.