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GST Rate will be revised from 6% to 0%

The newly elected government of Malaysia has announced the reduction of the Goods & Services Tax (GST) rate from 6% to 0% effective 1 June 2018. Therefore, all registered business entities have to comply with the GST rate adjustment to 0%.

In addition to this, the following GST Orders will be revoked with effect from 1 June 2018:

· GST (Zero-Rated Supply) Order 2014 [P.U.(A)272/2014] · GST (Relief) Order 2014 [P.U.(A)273/2014] · GST (Imposition of tax for supplies in respect of Free Zone) Order 2017 [P.U.(A)373/2016] · GST (Application to Government) Order 2014 [P.U.(A)185/2014] · GST (Imposition of tax for supplies in respect of Designated Area) Order 2014 P.U.(A)187/2014]

The zero-rated order, and a simultaneous repeal of various related orders, are to pave the way for a re-introduction of the Sales and Service Tax (SST).

The Royal Malaysian Customs Department has issued the following FAQ guide on 24 May 2018 to clarify some of the transitional issues:

Transitional Issues and planning that you have to address in your business include:

  1. Change of GST rate from 6% to 0% effective 1 June 2018

  2. Tax Invoice

  3. Registration

  4. Input Tax Claim

  5. Time of Supply

  6. Filing of GST Returns

  7. GST Special Schemes

  8. Tax Codes and Mapping of Tax Codes

  9. Contracts

  10. Record keeping

  11. Implication of reintroduction of SST

Let’s talk: Our management team is consisted of Licensed Tax Agents and GST Agents, please contact us if you need assistance with the topic above.

Disclaimer: Every effort has been made to provide accurate information. However, the information and regulations contained in this article are subject to changes and amendments by the relevant authority at any time. As such, the information in this article may not be current.

And the information provided in this article is general commentary only and shall not be considered as advice or recommendation. As all tax situations are specific to their facts and will differ from the situations in this article - if you have specific tax questions you should consult a licensed tax agent.

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