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Major Revision to the Customs and Excise Laws Take Effect on 1 January 2020

2019 draws to an end with a number of amendments to the Customs and Excise laws published on 31 December 2019 that take effect on 1 January 2020 .

These amendments cover a range of matters, including the introduction of the new Customs Regulations 2019 to supplement the Customs (Amendment) Act 2019 (Act A1593).

Other amendments include:-

•   Revised Customs Ruling Application form;

•   The introduction of the valuation method for determination of value of excisable goods locally manufactured (rules in respect of imported goods remain unchanged); and

•   Amendments to the Orders and Regulations pertaining to intoxicating liquors and Pangkor Island.

Please click on the above header link for the complete list of amendments at the official portal of e-Federal Gazette.

Customs Regulations 2019

The Customs Regulations 2019 gazetted provides more clarity in respect of the Customs (Amendment) Act 2019 (Act A1593) published on 9 July 2019 that introduced a total of 125 amendments to the Customs Act 1967 (Act 235).

The key amendments brought by the Customs (Amendment) Act 2019 (Act A1593) includes:-

•   Increased penalties for non-compliance;

•   Accurate Country of Origin declaration;

•   Shortening of the re-export period to qualify for Duty Drawback; and

•   Provisions in relation to Pangkor Island.

Please click on the above header link for our Tax Whiz – Amendment Bills 2019 dated 11 April 2019 for the detailed insights.

Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019

For all excisable goods manufacturers, the Computed Value Method (“CVM”) is now mandatory in determining the excisable value of goods locally manufactured.

Manufacturers of sugar sweetened beverages, alcoholic beverages, passenger cars and tobacco products must take immediate steps in order to demonstrate that the price of excisable goods sold, whether to a related company or not, meets the new valuation requirements.  For CVM, each Stock Keeping Unit (“SKU”) is required to have a computation.  The calculation not only includes direct cost, it also requires a prescribed list of costs such as selling cost, royalty / licensing fees, warranty, etc. to be included.  This is not a straightforward process that often requires an extensive analysis of past and present records and data.

It is worth noting that the Sales Tax (Determination of Sale Value of Taxable Goods) Regulations 2018 that took effect on 1 September 2018 has very similar requirements in respect of sale between related companies.  Manufacturers of goods that are subject to both Excise Duty and Sales Tax should take steps to review and ascertain whether invoice value meet the requirements of the CVM. 

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
+ 603 7721 7020

Long Yen Ping
Executive Director –
Head of Global Mobility Services
+ 603 7721 7018

Bob Kee
Executive Director –
Head of Transfer Pricing
+ 603 7721 7029

Ng Sue Lynn
Executive Director –
Head of Indirect Tax
+ 603 7721 7271

Soh Lian Seng
Executive Director –
Head of Tax Risk Management
+ 603 7721 7019

Nicholas Crist
Executive Director –
Corporate Tax
+ 603 7721 7022

Neoh Beng Guan
Executive Director – 
Corporate Tax
+ 603 7721 7025

Ong Guan Heng
Executive Director – 
Corporate Tax
+ 603 7721 7027

Chang Mei Seen
Executive Director – 
Transfer Pricing
+ 603 7721 7028

Ivan Goh
Executive Director – 
Transfer Pricing
+ 603 7721 7012


Evelyn Lee 
Executive Director –
Penang Tax
+604 238 2288 (ext. 312)

Regina Lau
Executive Director –
Kuching & Miri Tax
+6082 268 308 (ext. 2188)

Titus Tseu
Executive Director –
Kota Kinabalu Tax
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director –
Johor Bahru Tax
+607 266 2213 (ext. 2514)

Crystal Chuah Yoke Chin
Tax Manager –
Ipoh Tax
+605 253 1188 (ext. 320)