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Tax Alert 24 December 2019

Welcome to Tax Alert, Grant Thornton Malaysia’s newsletter on the latest tax updates and information.

Updates on Service Tax

The Service Tax (Amendment) (No. 2) Regulations 2019 was gazetted recently on 23 December 2019. The main highlights of the amendment cover areas announced in the 2020 Budget and other new amendments, which will take effect from 1 January 2020.

Amendments announced in the 2020 Budget

Group relief facility

  • Group relief for selected taxable services under the professional group be allowed even if the taxable service is also provided by a company to another person outside the group of companies, on the condition that the total value of taxable services provided to another person outside the group of companies in that month and the eleven months immediately succeeding that month does not exceed an amount of five per cent (5%) of the total value of taxable services. 

Exemption on provision of training and coaching services for disabled person

  • Provision of training services or coaching services to a person who holds a valid Kad OKU issued under the Persons with Disabilities Act 2008 [Act 685] by the following training centre or coaching centre shall not be a taxable service:

        - registered with the Ministry of Health;

        - registered with the Social Welfare Department; or

        -recognised by any national association for persons with disabilities registered with the Registrar of Societies Malaysia.

New Amendments

Professional services under Group G

  • The scope of the taxable information technology services is broadened to include distribution and resell of information technology services on behalf of any person.
  • The following services provided by any person who operates online platform or market place will be taxable services:

         - the provision of electronic medium that allows the suppliers to provide supplies to customers.

         - the provision of digital services including transaction for provision of digital services on behalf of any person.

Other services under Group I

  • The provision of taxable telecommunication services is expanded to include the provision of digital services. 
  • The provision of taxable advertising services is expanded to all types of advertising services including digital advertising services.