Malaysia: Clarification of extended service tax relief for hotels, accommodation operators (COVID-19)

The service tax exemption has been extended for hotels and accommodation operators.

The service tax exemption has been extended for hotels and accommodation operators.

A temporary exemption from service tax allowed accommodation operators (hotels, inns, lodging houses, service apartments, homestays and any other similar establishments) has been extended through 31 December 2021. The relief is offered in response to the coronavirus (COVID-19) pandemic.

The service tax exemption was previously provided from 1 March 2020 through 30 June 2021, and then extended through 31 December 2021.

The Royal Malaysian Customs Department issued Service Tax Policy 2/2021 to clarify that the service tax exemption for the extended period—from 1 July 2021 to 31 December 2021—is limited to the provision of accommodation premises. All other taxable services provided by accommodation operators are still subject to services tax at a rate of 6%.

Read a June 2021 report prepared by the KPMG member firm in Malaysia 

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. 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. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.