Subsidiary Legislation for Digital Services Tax Gazetted
30 September 2019
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 –
- Part II (Registration), Part V (Electronic Services), regulation 17 (General Penalty) and regulation 18 (Forms) will come into operation on 1 October 2019; and
- the other provisions of the Regulations will come into operation on 1 January 2020.
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.
The Service Tax (Amendment) Act 2019 will come into operation on a date to be appointed by the Minister of Finance by notification in the Gazette.