Malaysia: Service tax and exemption for certain banking digital services

Guidance addressing exemption from service tax for digital services provided in relation to banking or financial services

Service tax and exemption for certain banking digital services

The Royal Malaysian Customs Department (RMCD) issued guidance (Amendment to Service Tax Policy 10/2020) addressing the exemption from service tax for digital services provided in relation to banking or financial services. 

The guidance clarifies that the service tax exemption applies to:

  • Digital service providers that charge fees to the service recipient (bank account holder) to initiate transfer or withdrawal of fund
  • The fees charged refer to fee charges for transaction of withdrawal or transfer of funds only
  • The fees are charged direct to service recipient (bank account holder).

Extension of time for the submission of SST-02 return for the May to June 2021 tax period

The RMCD also announced an extension of time to file the SST-02 return for the May to June 2021 tax period.  Taxpayers affected by the movement control order and that could not furnish the SST-02 return for the May to June 2021 tax period by 31 July 2021 are given an extension of time until 31 August 2021 to file. This extension relief was provided in response to the coronavirus (COVID-19) pandemic.

Read an August 2021 report prepared by the KPMG member firm in Malaysia 

 

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