Digital Tax Malaysia 2020

Effective 1 january 2020 digital services provided by foreign service providers registered are also subject to the 6 service tax.

Digital tax malaysia 2020. In general businesses have been required to self account for service tax imposed on imported taxable services at a rate of 6. This move was in line with the government s plan to level the playing field in malaysia between local. The malaysian government first announced that a 6 digital tax will be imposed on foreign service providers effective jan 1 2020 at last year s budget tabling. This implementation comes into effect for.

Starting 1 january 2020 google malaysia g suite services will include a 6 digital tax. No more digital service tax for exabytes digital services as stated at the guide on. Digital service tax in malaysia taxes on the digital economy. Effective 1st january 2020 service tax shall be charged and levied on any digital service provided by a foreign registered person frp to any consumer in malaysia.

Written by michelle brohier. Businesses showing a yearly turnover of more than 500 000 ringgit us 120 000 are obligated to pay the dst. The service tax amendment 2019 bill was approved by dewan rakyat on april 8 this year to introduce tax on foreign registered persons providing digital services to consumers in the country. Starting 1 january 2020 a 6 service tax will be implemented for digital service providers in the country.

Malaysia digital service tax extended to supplies from foreign digital service providers on january 1 2020. Beginning 1 january 2020 the malaysian government will be imposing the digital service tax dst in malaysia applicable on all digital services imported by consumers in malaysia under the business to consumer b2c regime. Under this new law digital tax defaulters can be fined up to rm50. Malaysia digital service tax rules at a rate of 6 brought foreign suppliers of digital services into scope from the start of 2020.

Investors should track malaysia s regulatory policies on digital services to stay compliant. Digital services as issued by the royal malaysian customs department. Starting january 1 2020 foreign digital service providers must pay digital service tax dst of six percent in malaysia. The company spokesperson issued a public statement confirming the tax to be imposed on user purchases next year.

Malaysia is the second country in south east asia to introduce such a tax along with singapore. The year 2020 will see a 6 service tax come into effect for digital services such as facebook ads google s g suite and adobe s software subscriptions in malaysia for facebook in particular the.