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Tax Alert May 2018

GST will be zero-rated with effect from 1 June 2018

The repeal of GST is one of the election manifestos of the new Malaysian Government. Sales and Service Tax (SST) is mooted as the replacement. At this juncture, there is no indication as to when and how SST will be reintroduced.

On 16 May 2018, the Ministry of Finance (MoF) announced that the supply of goods and services in Malaysia will be subject to GST at 0% instead of 6% with effect from 1 June 2018. This change of tax rate applies also to GST levied on the importation of goods except for the supply of goods and services that are exempt under the Goods and Services Tax (Exempt Supply) Order 2014 and its related amendment orders.

Based on the information presently available, all other GST provisions will still be applicable. These include the issuance of tax invoices, submission of GST returns and claims of input tax credit and bad debt relief. Businesses are also required to ensure that the prices of the goods and services supplied are in compliance with the Price Control and Anti-Profiteering Act 2011.

In view of the change in the GST tax rate and the possible reintroduction of SST, we would like to bring to your attention to the following matters to consider in the meantime:

 GST Zero Rated

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