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Finance Act 2019

The Finance Act 2019 has received Royal Assent and has been published in the Gazette on 31 December 2019.  The Act will come into operation on a date to be appointed by the Minister of Finance.

Please click on the above header link for a copy of the Act at the official portal of e-Federal Gazette

Meanwhile, please refer to our Tax Whiz on 17 October 2019 for more details on the amendment.

Effective Date of Amendment Acts

The effective date for the following Acts has been set as 1 January 2020 :

•  Sales Tax (Amendment) Act 2019

•   Service Tax (Amendment) Act 2019 – Paragraphs 3(a) and 3(d) in relation to the interpretation of “Pangkor”

•   Customs (Amendment) Act 2019 – except Section 69

•   Free Zones (Amendment) Act 2019

•   Excise (Amendment) Act 2019

Please click on the above header link for copies of the “Appointment of Date of Coming into Operation” at the official portal of e-Federal Gazette.

Meanwhile, please refer to our Tax Whiz on 11 April 2019 for more details on the amendments.

New and Amendment Regulations and Orders

The following new and Amendment to Regulations and Orders relating to Sales Tax, Service Tax, Customs Duties, Free Zones as well as Excise Duties were published in the Federal Government Gazette on 31 December 2019:-

Sales Tax

a)      Sales Tax (Customs Ruling) (Amendment) Regulations 2019 – P.U. (A) 400/ 2019

b)      Sales Tax (Compounding of Offences) (Amendment) Regulations 2019 – P.U. (A) 392/ 2019

c)      Sales Tax (Imposition of Sales Tax in respect of Designated Areas) (Amendment) (No.2) Order 2019 – P.U. (A) 391/ 2019

d)      Sales Tax (Amendment) Regulations 2019 – P.U. (A) 390/ 2019

Service Tax

e)      Service Tax (Customs Ruling) (Amendment) Regulations 2019 – P.U. (A) 406/ 2019

f)       Service Tax (Imposition of Tax for Taxable Service in respect of Designated Areas and Special Areas) (Amendment) (No.2) Order 2019 – P.U. (A) 393/ 2019

g)      Service Tax (Digital Services) (Amendment) Regulations 2019 – P.U. (A) 389/ 2019

h)      Service Tax (Persons Exempted from Payment of Tax) (Amendment) Order 2019 – P.U. (A) 388/ 2019

Customs Duties

i)       Customs Duties (Pangkor) Order 2019 – P.U. (A) 413/ 2019 – New

j)       Customs (Prohibition of Imports) (Amendment) (No 6) Order 2019 – P.U. (A) 407/ 2019

k)      Customs (Customs Ruling) (Amendment) Regulations 2019 – P.U. (A) 405/ 2019

l)       Customs Duties (Exemption) (Amendment) (No 3) Order 2019 – P.U. (A) 403/ 2019

m)    Customs Regulations 2019 – P.U. (A) 397/ 2019 – New

n)      Customs Duties (Exemption) (Amendment) (No.3) Order 2019 – P.U. (A) 396/ 2019

Free Zones

o)      Free Zones (Amendment) Regulations 2019 – P.U. (A) 416/ 2019

Excise Duties

p)      Excise Duties (Pangkor) Order 2019 – P.U. (A) 412/ 2019 – New

q)      Excise (Amendment) (No 2) Regulations 2019 – P.U. (A) 411/ 2019

r)       Excise (Sale by Retail of Intoxicating Liquor by Chemists) (Amendment) Order 2019 – P.U. (A) 410/ 2019

s)      Excise (Sale of Intoxicating Liquors) (Amendment) Regulations 2019 – P.U. (A) 409/ 2019

t)       Excise (Bottling And Movement of Intoxicating Liquors) (Amendment) Regulations 2019 – P.U. (A) 408/ 2019

u)      Excise Duties (Exemption) (Amendment) (No 4) Order 2019 – P.U. (A) 404/ 2019

v)      Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2020 – P.U. (A) 402/ 2019 – New

w)     Excise (Customs Ruling) (Amendment) Regulations 2019 – P.U. (A) 401/ 2019

These Regulations and Order come into operation on 1 January 2020.

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

Meanwhile, set out below is a summary of some of the key amendments for Sales Tax and Service Tax:-

Amendments to Sales Tax Regulations 2018

§   Application for Sales Tax deduction under Regulation 16A shall now be made to the Director General of Customs.

§ The drawback conditions under Regulation 17 has been updated.

Amendments to Service Tax (Digital Services) Regulations 2019

§    The prescribed Forms for application for Service Tax registration (DST-01 Form) and Service Tax Return (DST-02 Form) have been updated in the Schedule to the Regulations.

§    The Service Tax Return (DST-02 Form) shall be furnished through electronic service or by the use of electronic means as the Director General may determine.

Amendments to Service Tax (Persons Exempted from Payment of Tax) Order 2018

§   Additional condition that the taxable service exempted is not for personal consumption by the person exempted (for existing item 1 and 2 of the Order).

§   Any person who, in carrying on his business, acquires digital services from foreign registered person is exempted from payment of Service Tax.

Conditions for Service Tax exemption:

i)       The person who shall account for Service Tax under Section 26 or Section 26A of the Service Tax Act 2018.

ii)      The person exempted holds an invoice or document issued by the foreign registered person under Regulation 6 of the Service Tax (Digital Services) Regulations 2019.

iii)     The taxable service exempted is not for personal consumption by the person exempted.

§   The taxable person specified in column (1) item 8 of Group G in the First Schedule to the Service Tax Regulations 2018 is exempted from payment of Service Tax on information technology services acquired from any person who is outside Malaysia.

Conditions for Service Tax exemption:

i)       The taxable person exempted is a registered person.

ii)      The taxable service exempted is identical to the information technology service distributed or sold by the taxable person exempted.

iii)     The taxable service exempted is not for personal consumption by the taxable person exempted.

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

Should you have any questions or require further clarification, please do not hesitate to contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organisation at the following telephone numbers for respective offices: 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)