S S T IMPLEMENTATION BRIEFING SESSION PROPOSED SERVIC E TAX - PowerPoint PPT Presentation

S S T IMPLEMENTATION BRIEFING SESSION PROPOSED SERVIC E TAX IMPLEMENTATION MODEL Royal Malaysian Customs Department fppt.com

CONTENT OF BRIEFING Proposed Legislation • Special rules for specific areas Scope and charge • Accounting Service tax mechanism • Miscellaneous Taxable person Taxable goods Rate Taxable services Registration Returns / Payment Contra System Facility

Proposed Service Tax Legislation Act •Service Tax Act 2018 Regulations •Service Tax Regulations 2018 •Service Tax (C ustoms Ruling) Regulations 2018 •Service Tax (Compounding of Offences) Regulations 2018 Order •Service Tax (Amount Of Value o f Taxable Service) Order 2018 •Service Tax (Rate Of Tax) Order 2018 •Service Tax (Appointment o f Date o f Coming Into Operation) Order 2018

SC OPE AND C HARGE Se r v ice t a x is ch a r g e d o n :- o a n y p r o v is io n o f t a x a b le s e r v ice s ; o m a d e in t h e co u r s e o r fu r t h e r a n c e o f a n y b u s in e s s ; o b y a t a x a b le p e r s o n ; a n d o in M a la y s ia . Se r v ice t a x is n o t c h a r g e a b le o n : o im p o r t e d s e r v ice s o e xp o r t e d s e r v ice s

HOW SERVICE TAX WORKS? Government collects tax ONCE (at the start) Businesses Tax rate = 6% service provider Consumer Government collects tax ONCE (at the start)

TAXABLE PERSON o A s e r v ic e p r o v id e r w h o is lia b le t o b e r e g is t e r e d o r r e g is t e r e d u n d e r t h e S e r v ic e T a x A c t 2 0 1 8 o t h e s e r v ic e p r o v id e r p r o v id e s t a x a b le s e r v ic e s in t h e c o u r s e o r fu r t h e r a n c e o f b u s in e s s in M a la y s ia Q fppt.com

✓ TAXABLE SERVIC ES AND RATE OF TAX Threshold > v a lu e o f t a x a b le s e r v ic e s p r o v id e d b y a s e r v ic e p r o v id e r fo r a p e r io d o f 1 2 m o n t h s t h a t e x c e e d s a t h r e s h o ld o f R M 5 0 0 ,0 0 0 is li a b le t o b e r e g is t e r e d Rate of tax r F ix e d a t a r a t e o f 6 % > P r o v is io n o f c r e d it c a r d o r c h a r g e c a r d s e r v ic e s A s p e c ific r a t e o f t a x o f R M 2 5 is im p o s e d u p o n i s s u a n c e o f p r in c ip a l o r s u p p le m e n t a r y c a r d a n d e v e r y s u b s e q u e n t y e a r o r p a r t t h e r e o f L i fppt.com

TAXABLE SERVIC ES r H o t e l r E m p lo y m e n t a g e n c y Se c u r it y > In s u r a n c e a n d T a k a fu l > > Se r v ic e o f fo o d a n d b e v e r a g e > M a n a g e m e n t s e r v ic e s p r e p a r a t io n r P a r k in g r Clu b r M o t o r v e h ic le s e r v ic e o r r e p a ir r Ga m in g r Co u r ie r > T e le c o m m u n ic a t io n > H ir e a n d d r iv e c a r r P a y -T V r A d v e r t is in g > F o r w a r d in g a g e n t s > D o m e s t ic flig h t e x c e p t R u r a l r Le g a l A ir Se r v ic e s r A c c o u n t in g r Cr e d it o r c h a r g e c a r d r Su r v e y in g r IT s e r v ic e s r A r c h it e c t u r a l r E le c t r ic it y r Va lu e r > E n g in e e r in g

HOTEL, INSURANC E AND TAKAFUL Hotel in clu d e s: r lo d gin g h o u se r s e r vice a p a r t m e n t r h o m e s t a y r Inn r r e st h o u se r b o a r d in g h o u s e Se r vice t a x ch a r ge d o n a ct u a l va lu e o f t a xa b le s e r vice p r o vid e d o Insurance and Takaful in clu d e s : > All in s u r a n ce B2 B 9 fppt.com

SERVIC E OF FOOD AND BEVERAGE PREPARATION Service of food and beverage preparation in clu d e s : r r e s t a u r a n t r ca fe r ca t e r in g r t a k e -a w a y r food tr u ck r r e ta il o u tle t r h a w k e r s r etc. Se r vice t a x ch a r ge d o n a ct u a l va lu e o f t a xa b le s e r vice p r o vid e d o Provision of electricity: > B2 C; m o r e t h a n 6 0 0 k W h Se r vice t a x ch a r ge d o n a ct u a l va lu e o f t a xa b le s e r vice p r o vid e 10 fppt.com

CLUBS AND GAMING Clu b s r N ig h t c lu b r P r iv a t e clu b > Go lf clu b a n d g o lf d r iv in g r a n g e o Se r v ice t a x ch a r g e d o n a ct u a l v a lu e o f t a xa b le s e r v ice p r o v id e d G a m in g r Ca s in o r Ga m e o f ch a n ce r Sw e e p s t a k e s > Ga m in g m a ch in e s > Lo t t e r y > B e t t in g o Se r v ice t a x ch a r g e d o n co lle ct io n , b a s e d o n fo r m u la 1 1

REGISTRATION Type of C onditions registration V a lu e e x c e e d R M 5 0 0 ,0 0 0 M a n d a t o r y ■ 1 st d a y o f t h e m o n t h fo llo w i n g t h e m o n t h o f a p p li c a t i o n V a lu e b e lo w R M 5 0 0 ,0 0 0 V o lu n t a r y ■ D G m a y d e t e r m in e In t h e n a m e o f t h e b r a n c h / d i v i s i o n B r a n c h / D iv is io n ■ D G m a y d e t e r m in e

SERVICE TAX REGISTRATION Determination of Taxable Turnover • Se r v ic e P r o v id e r s h o u ld c a lc u la t e t h e v a lu e o f t a x a b le s e r v ic e s p r o v id e d fo r a p e r io d o f 1 2 m o n t h s u s in g t h e fo llo w in g m e t h o d : i. H is t o r ic a l M e t h o d ; T h e t o t a l v a lu e o f t a x a b le s u p p lie s in t h a t m o n t h a n d t h e 1 1 m o n t h s im m e d ia t e ly p r e c e d in g t h e m o n t h ; ii. F u t u r e M e t h o d ; T h e t o t a l v a lu e o f t a x a b le s u p p lie s in t h a t m i a n d t h e 1 m o n t h s im m e d ia t e ly s u c c e e d in g t h e m o n t h

SERVICE TAX REGISTRATION Transitional Registration • Any person who liable to register are required to register before 1st September 2018 and registration commencement date will be on 1st September 2018. • Automatic Registration - Service Provider who is a GST Registrant which have been identified and fulfilled the required criteria will be registered automatically as a registered person. - A registrant person need to charge tax beginning 1st September 2018. Persons Not Registered Automatically - Service Provider who is a GST registered person that fulfil the required criteria to be registered but was not registered by 1st September 2018 need to apply for registration within 30 days from the comme d a t e . fppt.com

RETURNS o R e g is t e r e d p e r s o n h a s t o d e c la r e s e r v ic e t a x r e t u r n e v e r y t w o m o n t h s a c c o r d i n g t o t h e t a x a b le p e r io d . o S e r v ic e t a x r e t u r n h a v e t o b e s u b m it t e d n o t la t e r t h a n t h e la s t d a y o f t h e fo llo w i n g m o n t h a ft e r t h e t a x a b le p e r io d e n d e d . o S e r v ic e t a x r e t u r n h a v e t o b e s u b m it t e d ir r e s p e c t iv e , \ w h e t h e r t h e r e is a n y t a x t o b e p a id o r o t . o S e r v ic e t a x r e t u r n m u s t b e s u b m it t e d e le c t r o n i c a lly : b y p o s t . 15P fppt.com

PAYMENT o P a y m e n t o f s e r v ic e t a x h a s t o b e m a d e ■ E le c t r o n ic a lly ; o r ■ B y c h e q u e , b a n k d r a ft a n d p o s t e d t o S S T P r o c e s s i n g C e n t r e . o L a t e p a y m e n t p e n a lt y o n t h e a m o u n t o f s e r v ic e t a x n o t p a id ■ 1 0 % - fir s t 3 0 d a y s p e r io d . ■ 1 5 % - s e c o n d 3 0 d a y s p e r io d ■ 1 5 % - t h ir d 3 0 d a y s p e r io d N o t e : M a x im u m p e n a lt y 4 0 % a ft e r 9 0 d a y s

SERVIC E TAX FAC ILITY Contra System R e g is t e r e d p e r s o n is a llo w e d t o d e d u c t s e r v ic e t a x in h is r e t u r n fo r a n y c a n c e lla t io n a n d t e r m in a t io n o f s e r v ic e s o r a n y o t h e r r e a s o n s s u c h a s r e d u c in g p r e m iu m s o r d is c o u n t s .

SPEC IAL RULES Treatment in Designated Area (DA) De s ign ate d Are a La b u a n , La n g k a w i a n d T io m a n ( n o t d e e m e d o u ts id e Malays ia) Se rvice s p ro vid e d b e tw e e n N o t s u b je ct t o s e r v ice t a x e x ce p t p r e s cr ib e d b y M in is t e r an d w ith in DA Pro vis io n s o f s e rvice s - F r o m P CA t o DA - s u b je ct t o s e r v ice t a x e x ce p t p r e s cr ib e d b y M in is t e r - F r o m DA t o P CA - s u b je ct t o s e r v ice t a x - T o / fr o m DA t o SA* - n o s e r v ice t a x * Sp e cia l Ar e a = Fr e e Zo n e , Lice n s e d W a r e h o u s e , Lice n s e d M a n n fa r h ir in a W a r e h o u s e a n d Jo in t De ve lo p m e n t Ar e a (JDA) fppt.com

SPEC IAL RULES Treatment in Special Area (SA) Sp e cial Are a Fr e e Zo n e , Lice n s e d W a r e h o u s e , Lice n s e d M a n u fa ct u r in g ( n o t d e e m e d o u ts id e W a r e h o u s e a n d Jo in t D e v e lo p m e n t Ar e a (JDA) Malays ia) Se rvice s p ro vid e d b e tw e e n N o t s u b je ct t o Se r v ice Ta x e x ce p t p r e s cr ib e d b y M in is t e r an d w ith in SA Pro vis io n s o f s e rvice s - F r o m P CA t o SA - s u b je ct t o s e r v ice t a x e x c e p t p r e s cr ib e d b y M in is t e r - Fr o m SA t o P CA - s u b je c t t o s e r v ice t a x - T o / fr o m SA t o DA - n o s e r v ice t a x - F r o m P CA ( o t h e r t h a n SA) t o FZ o r LM W - s u b je c t to s e r v ice t a x