Malaysia Hotline: +603- 2141 8908
Goods and services tax in Malaysia (GST) was
implemented since 1 April 2015. It had the purpose of replacing the sales and
services tax which has been levied for several years in the country. The 6% tax
now replaces the sales-and-service which was between 5-10%. The introduction of GST is one of the
government’s reform programs aiming at increasing the efficiency and
effectiveness of current tax system. GST is charged on the taxable supply of
goods and services produced in the course of business in Malaysia by a taxable
person. In addition, GST is also levied on the importation of goods and
services.
It is important to note that GST can be charged only
if the business is registered under GST. If the annual turnover of taxable
supplies does not reach the prescribed threshold, a business is not liable to
be registered. As a result, GST cannot be charged and collected from their
customers upon supply of goods and services. Nonetheless, businesses can apply
to be registered on a voluntarily basis. GST is considered to be a multi-stage
consumption tax on goods and services. This means that GST is charged on the
supply of goods and services at each stage of supply chain from the supplier up
to the retail stage of the distribution. Although GST is imposed at each level
of supply chain, it does not turn into the part of the product’s cost since GST
paid on the business inputs is claimable.
A taxable supply can be zero-rated or
standard-rated. On the other hand, out of scope and exempt are not considered
taxable supplies. GST needs to be charged on the value of the supply.
Standard-rated supplies are the goods and services that are charged GST with a
standard rate of 6%. Unlike standard-rated, zero-rated supplies are subject to
a zero rate. Zero-rated items vary from agriculture products, livestock and
essential foods to exported services. Besides standard- and zero-rated
supplies, exempt supplies are non-taxable items that are not subject to GST.
Businesses act as intermediaries by collecting and paying the GST to the
government. Since they have both input and output taxes, they can recover
credit back on their inputs. In the event that their input tax is greater than
output tax, they can recover back the difference.
Contact us
If you have further queries, please contact Tannet
24 hours Malaysia hotline：603-21418908;
24 hours Hong Kong hotline：852-27837818;
24 hours Hong Kong hotline：86-755- 36990589;
Email: mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my