Following from the announcement by the Minister of Finance at the 2019 Malaysian Budget that digital services imported by consumers will be subject to service tax commencing from 1 January 2020, and the amendment of the Service Tax Act 2018 pursuant to the Service Tax (Amendment) Act 2019¹, the Service Tax (Digital Services) Regulations 2019 [P.U.(A) 269/2019] (‘the Regulations’) and the Service Tax (Rate of Digital Services Tax) Order 2019 [P.U.(A)271/2019] (‘the Order’) have been gazetted on 30 September 2019.
 
The Regulations will come into operation as follows –
 

 

 
Amongst others, the Regulations require a foreign service provider of digital services to consumers to be registered under the Service Tax Act 2018 if the total value of digital services provided, or to be provided, in a 12-month period exceeds RM500,000.  
 
The Order, which comes into operation on 1 January 2020, provides that service tax is to be charged by a registered foreign digital service provider at the rate of 6% of the value of the digital services charged by such service provider.
 

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