© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 0
Tax WhizTax highlights from your advisers
KPMG in Malaysia
Updated as at 23 April 2020
Service Tax Policy No 10/2020
Service Tax Exemption on Digital Services relating to Banking and Financial Services
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 1
Tax Whiz 2020 | Service Tax Policy No 10/2020
Service Tax Exemption on Digital Services relating to Banking and Financial Services
The Royal Malaysian Customs Department (“RMCD”) has issued the Service Tax Policy 10/2020 (as at 17 April 2020) with regards to the Service Tax exemption on digital services provided in relation to banking and financial services.
Set out below is a summary of the Service Tax Policy:-
Effective 1 January 2020, the provision of digital services [taxable under item (m), Group G, First Schedule of the Service Tax Regulations 2018] in relation to banking and financial services by a local service provider is exempted from Service Tax under Section 34(3)(a) of the Service Tax Act 2018, where the service recipient is exempted from the payment of Service Tax.
The abovementioned Service Tax exemption is only applicable to the digital services provided in relation to banking and financial services by specific local financial service providers, as listed under Paragraphs 4.1, 4.2 and 4.3 of the Service Tax Policy.
Where Service Tax has been charged by a registered person on the provision of digital services on or after 1 January 2020 (which qualified for the exemption), the adjustments are as follows:
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2
Tax Whiz 2020 | Service Tax Policy No 10/2020
a) Where payment has not been received by the registered person, but Service Tax has been accounted for (e.g. on invoice basis)
The registered person should issue a credit note in accordance with the Service Tax legislation and make adjustment in the Service Tax Return accordingly.
b) Where payment has been received by the registered person
No refund is allowable on the Service Tax that has been paid.
Note:
Paragraph 6.2 of the Service Tax Policy states that, for taxable services spanning 1 January 2020, Service Tax should be charged and accounted on the services provided prior to 1 January 2020.
Notwithstanding the above, it should be noted that the provision of digital services [under item (m), Group G, First Schedule of the Service Tax Regulations 2018] is prescribed to be a taxable service effective 1 January 2020.
Please click here for a copy of the Service Tax Policy at the RMCD’s official website.
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3
Tai Lai KokExecutive Director –Head of Tax and Head of Corporate [email protected]+603 7721 7020
Long Yen PingExecutive Director –Head of Global Mobility [email protected]+603 7721 7018
Ng Sue LynnExecutive Director – Head of Indirect [email protected]+603 7721 7271
Soh Lian SengExecutive Director –Head of Tax Risk [email protected]+603 7721 7019
Bob KeeExecutive Director – Head of Transfer [email protected]+603 7721 7029
Kuching & Miri OfficesRegina LauExecutive Director – Kuching [email protected]+6082 268 308 (ext. 2188)
Penang OfficeEvelyn Lee Executive Director – Penang [email protected]+604 238 2288 (ext. 312)
Kota Kinabalu OfficeTitus TseuExecutive Director – Kota Kinabalu [email protected]+6088 363 020 (ext. 2822)
Johor Bahru OfficeNg Fie LihExecutive Director – Johor Bahru [email protected]+607 266 2213 (ext. 2514)
Petaling Jaya Office
Outstation Offices
Nicholas CristExecutive Director – Corporate [email protected]+ 603 7721 7022
Dato’ Leanne KohExecutive Director – Corporate [email protected]+603 7721 7026
Neoh Beng GuanExecutive Director – Corporate [email protected]+ 603 7721 7025
Ong Guan HengExecutive Director – Corporate Tax [email protected]+ 603 7721 7027
Chang Mei SeenExecutive Director – Transfer [email protected]+ 603 7721 7028
Ivan Goh Executive Director – Transfer [email protected]+ 603 7721 7012
Contact us
Ipoh OfficeCrystal Chuah Yoke ChinTax Manager – Ipoh [email protected]+605 253 1188 (ext. 320)
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4
Tax Whiz 2020 | Report Name
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Petaling Jaya
Level 10, KPMG Tower, 8, First Avenue, Bandar Utama, 47800 Petaling Jaya, SelangorTel: +603 7721 3388Fax: +603 7721 3399Email: [email protected]
Penang
Level 18, Hunza Tower, 163E, Jalan Kelawei, 10250 PenangTel: +604 238 2288Fax: +604 238 2222Email: [email protected]
Kuching
Level 2, Lee Onn Building, Jalan Lapangan Terbang, 93250 Kuching, SarawakTel: +6082 268 308Fax: +6082 530 669 Email: [email protected]
Kota Kinabalu
Lot 3A.01 Level 3A, Plaza Shell, 29, Jalan Tunku Abdul Rahman, 88000 Kota Kinabalu, SabahTel: +6088 363 020Fax: +6088 363 022Email: [email protected]
Johor Bahru
Level 3, CIMB Leadership Academy, No. 3, Jalan Medini Utara 1, Medini Iskandar, 79200 Iskandar Puteri, JohorTel: +607 266 2213Fax: +607 266 2214Email: [email protected]
Ipoh
Level 17, Ipoh Tower, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, PerakTel: +605 253 1188Fax: +605 255 8818Email: [email protected]
Miri
1st Floor, Lot 2045, Jalan MS 1/2,Marina Square, Marina Parkcity,98000 Miri, SarawakTel: +6085 321 912Fax: +6085 321 962 Email: [email protected]
instagram.com/kpmgmalaysia
facebook.com/KPMGMalaysia
twitter.com/kpmg_malaysia
linkedin.com/company/kpmg-malaysia
kpmg.com/my
KPMG Offices