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Effective Dates of Service Tax (Amendment) Act 2019

The effective dates for the Service Tax (Amendment) Act 2019 have been appointed as follows:-

i.      1 September 2019 for amendments including the option to apply for Service Tax to be due at the time invoice is issued, the 12-month deemed paid rule is from the date the taxable service was provided etc.

ii.     1 October 2019 for provisions relating to a foreign service provider such as liability to register etc.

iii.    1 January 2020 for the new Part IXA relating to digital services, including duty of a foreign registered person to issue invoice, pay Service Tax and keep records etc.

Note that amendments to include Pangkor Island as a Designated Area are still pending an effective date.

For full details on the effective dates for the Amendment Act, please click on the above header link for a copy of the Order P.U. (B) 426 – Appointment of Date of Coming into Operation at the official portal of e-Federal Gazette.

Amendments to Service Tax Regulations and Order

A number of amendments to the Service Tax Regulations and Order have been published in the Federal Government Gazette on 30 August 2019.  These Regulations and Order come into operation on 1 September 2019.

Please click on the above header link for a copy of the Regulations and Order at the official portal of e-Federal Gazette.

We set out below a summary of the key amendments:

  1. Service Tax (Imposition of Tax for Taxable Service in respect of Designated Areas and Special Areas) (Amendment) Order 2019 – P.U. (A) 231
  • The provision of food and beverages in Special Areas by any nigh club, dance hall, cabaret or public house/ beer house is prescribed to be taxable.
  1. Service Tax (Amendment) Regulations 2019 – P.U. (A) 232
  • Regulation 6A – the value of taxable service where payment is made to coin/ token operated machine or device is inclusive of Service Tax.
  • First Schedule, Paragraph 3A – acquisition of certain taxable services in Group G from any company within the same group of companies outside Malaysia shall not be an imported taxable service (i.e. the Ministerial exemption is now legislated).
  • First Schedule, Group G – management services exclude tourism services and logistic services.
  • First Schedule, Group I – amusement park services have been deleted from the list of taxable services.
  • First Schedule, Group I – the provision of cleaning services exclude coin/ token operated laundry services.
  • Third Schedule – Form SST-01, Form SST-02 and Form SST-02A have been updated.

In respect of the above amendments where the provision of tourism management services, logistic management services, amusement park services and coin/ token operated laundry services (hereinafter referred to as “such Services”) are not taxable effective 1 September 2019, the Royal Malaysian Customs Department (“RMCD”) has issued the Service Tax Policy No. 1/2019 which provides that:-

  1. For the period from 1 January 2019 to 31 August 2019, such Services are exempted from Service Tax under Section 34(3) of the Service Tax Act 2018.
  2. The service provider shall issue an invoice without Service Tax if such Services have been provided but the invoice which relates to such Services has not been issued.
  3. The service provider shall issue credit note which relates to the invoice if the invoice for such Services has been issued but the payment has not been made by the customer.
  4. Any Service Tax collected from customers from 1 January 2019 must be remitted to the RMCD in accordance with Section 26 of the Service Tax Act 2018.
  5. No Service Tax refund is allowed for any person who has paid the Service Tax.

Please click on the above header link for a copy of the Policy at the MySST portal. 

  1. Service Tax (Compounding of Offences) (Amendment) Regulations 2019 – P.U. (A) 233
  • Payment of the compound offered can only be made by bank draft payable to the Director General and send by hand to the relevant Customs office.
  • Form 2 and Form 3 have been updated. 

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 endeavor 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.

Contact KPMG

For more information on our core service offerings, please contact:

Petaling Jaya Office

Tai Lai Kok
Executive Director –
Head of Tax and Head of Corporate Tax
ltai1@kpmg.com.my
+ 603 7721 7020

Long Yen Ping
Executive Director –
Head of Global Mobility Services yenpinglong@kpmg.com.my
+ 603 7721 7018

Bob Kee
Executive Director –
Head of Transfer Pricing
bkee@kpmg.com.my
+ 603 7721 7029

Ng Sue Lynn
Executive Director –
Head of Indirect Tax
suelynnng@kpmg.com.my
+ 603 7721 7271

Soh Lian Seng
Executive Director –
Head of Tax Risk Management
lsoh@kpmg.com.my
+ 603 7721 7019

Nicholas Crist
Executive Director –
Corporate Tax
nicholascrist@kpmg.com.my
+ 603 7721 7022

Dato’ Leanne Koh
Executive Director – 
Corporate Tax
leannekoh@kpmg.com.my
+ 603 7721 7026

Neoh Beng Guan
Executive Director – 
Corporate Tax
bneoh@kpmg.com.my
+ 603 7721 7025

Ong Guan Heng
Executive Director – 
Corporate Tax
guanhengong@kpmg.com.my
+ 603 7721 7027

Chang Mei Seen
Executive Director – 
Transfer Pricing
meiseenchang@kpmg.com.my
+ 603 7721 7028

Ivan Goh
Executive Director – 
Transfer Pricing
ivangoh@kpmg.com.my
+ 603 7721 7012

 

 

 

Evelyn Lee 
Executive Director –
Penang Tax
evewflee@kpmg.com.my
+604 238 2288 (ext. 312)

Regina Lau
Executive Director –
Kuching & Miri Tax
reglau@kpmg.com.my
+6082 268 308 (ext. 2188)

Titus Tseu
Executive Director –
Kota Kinabalu Tax
titustseu@kpmg.com.my
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director –
Johor Bahru Tax
flng@kpmg.com.my
+607 266 2213 (ext. 2514)

Crystal Chuah Yoke Chin
Tax Manager –
Ipoh Tax
ycchuah@kpmg.com.my
+605 253 1188 (ext. 320)