With the view of modernising its taxation system and improving business efficiency, Malaysia replaced its Sales and Service Tax regimes with GST effective 1 April 2015.
Malaysia has two rates of GST (6% and 0%), and provides for the zero-rating of exported goods, international services, basic food items, and many books.
The following supplies are generally GST exempt:
While the Malaysian GST regime has similarities to the Singaporean GST regime and draws input from the Australian, UK, New Zealand and South African GST/VAT rules, there are a number of unique schemes and “quirks” which multinational businesses operating in Malaysia should take note of, including the following:
Since the announcement in the 2014 budget, businesses operating in Malaysia have undergone an extensive implementation process, requiring a re-look at many pre-existing business practices, as well as updating their systems, processes and policies in order to be GST compliant.
As with any new tax system, there will be many updates and developments, and businesses should be looking to review and refine the implementation work undertaken in the lead up to 1 April 2015.
GST implementation is just the first step in being GST compliant. There will be numerous updates and developments with the new tax regime, and it will be important to stay abreast of these new developments to ensure your business remains GST optimised.
As GST reaches across every aspect of business, there will be GST implications arising from new acquisitions, new arrangements, contracts and new business expansion plans. PwC is here to help you identify and work through these GST implications, to give you peace of mind that your business’ future plans are GST optimised.
Find out more about our dedicated GST offerings here.