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Finance Act 2020

The Finance Act 2020 (“the Act”) has been gazetted on 31 December 2020 with no material differences from the Finance Bill 2020.  The Act comes into operation on 1 January 2021.

The Act and KPMG’s earlier highlights on Finance Bill 2020 can be accessed via the above header links.

Indirect Tax (Amendment) Acts

The following Indirect Tax (Amendment) Acts have been gazetted on 31 December 2020.  Please click on the above header link for copies at the Federal Gazette Portal of the Attorney General’s Chambers.

There were no material differences from the Indirect Tax Bills 2020.  KPMG’s earlier highlights on the Indirect Tax Bills 2020 can be accessed via the above header link.

These Amendment Acts come into operation on 1 January 2021.

(a)

Sales Tax (Amendment) Act 2020

(b)

Service Tax (Amendment) Act 2020

(c)

Customs (Amendment) Act 2020

(d)

Excise (Amendment) Act 2020

(e)

Free Zones (Amendment) Act 2020

Indirect Tax (Amendment) Regulations

The following Indirect Tax (Amendment) Regulations have been gazetted on 31 December 2020.  Please click on the above header link for copies at the Federal Gazette Portal of the Attorney General’s Chambers.

These Amendments to Regulations come into operation on 1 January 2021.

(a)

Sales Tax (Amendment) (No 2) Regulations 2020

Additional drawback conditions in respect of cigarettes, tobacco products and electronic cigarettes, as proposed in the 2021 Budget.

(b)

Service Tax (Amendment) (No 2) Regulations 2020

Minor enhancements noted.

(c)

Service Tax (Digital Services) (Amendment) (No 2) Regulations 2020 

A foreign registered person is now allowed to issue credit notes and debit notes under prescribed circumstances and conditions.

(d)

Customs (Amendment) (No 2) Regulations 2020 

Main changes relate to cigarettes and tobacco products as proposed in the 2021 Budget.

(e)

Excise (Amendment) Regulations 2020

Additional drawback conditions in respect of cigarettes, tobacco products and electronic cigarettes, as proposed in the 2021 Budget.

Indirect Tax New and Amendment Orders

The following New and Amendment Orders in respect of Indirect Tax have been gazetted on 31 December 2020.  Please click on the above header link for copies at the Federal Gazette Portal of the Attorney General’s Chambers.

These Orders come into operation on 1 January 2021.  The changes mainly relate to cigarettes, tobacco products and electronic cigarettes, as proposed in the 2021 Budget.

(a)

Sales Tax (Imposition of Sales Tax in Respect of Designated Areas) (Amendment) Order 2020

(b)

Customs Duties (Amendment) (No 3) Order 2020

(c)

Customs Duties (Langkawi) Order 2020

(d)

Customs Duties (Labuan) Order 2020

(e)

Customs Duties (Tioman) (Amendment) Order 2020

(f)

Customs Duties (Pangkor) (Amendment) Order 2020

(g)

Excise Duties (Amendment) Order 2020

(h)

Excise Duties (Langkawi) Order 2020

(i)

Excise Duties (Labuan) Order 2020

(j)

Excise Duties (Tioman) (Amendment) Order 2020

(k)

Excise Duties (Pangkor) (Amendment) Order 2020

(l)

Free Zones (Exclusion of Goods) (Amendment) Order 2020

Cigarettes, Tobacco Products and Electronic Cigarettes - FAQ

The Royal Malaysian Customs Department ("RMCD") has also on 30 December 2020, issued a FAQ on the measures implemented to combat illicit trade of tobacco and related products.

The FAQ is available in Malay language only.  Please click on the above link for a copy of the FAQ at the RMCD’s official website.

Our highlights are intended to provide a general overview of the key proposed tax changes and should not be used or relied upon as a substitute for detailed advice or as a basis for formulating business decisions.

Should you have any questions or require further clarification, please do not hesitate to email or 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 organization.

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.

Tai Lai Kok
Executive Director
Head of Tax 

Ng Sue Lynn
Executive Director
Indirect Tax Practice