Indirect Tax Services in Malaysia

After the re-introduction of the sales and services taxes, Malaysia has been increased its focus on indirect taxation and similar matters. Other tax services in Malaysia include but not limited to, sales tax, excise duty, import & export duties, product tariff code classification and valuation, and GST, etc.

So, let’s discuss all of these in direct taxes in detail.

Sales Tax & Service Tax

It is hard to classify the types of taxable goods and services. Hence, it’s important for businesses to control their financial submissions to service tax and sales tax and prevent ordinary penalties particularly when it comes to customs audit.  

Here is the list of sales tax and service tax most common services:

  • Sales tax/ service tax registration
  • Review of sales tax/ service tax returns
  • Assist in dealing with customs on SST issues
  • Retainer services
  • Handling customs audits
  • Health checks to identify areas of non-compliance
  • SST advisory services 

Goods and Services Tax (GST)

Goods and services tax or GST had been remained one of the most considered indirect tax services in Malaysia. But GST has been overruled on 1st of September 2018. However, businesses are still required to capture and report all transactions relating to GST period to Royal Malaysian Customs Department (RMCD). It is also noted that their tax records will be kept for seven years for GST closure audit purposes.

Services related to GST are:

  • GST refund application preparation/submission
  • GST appeal and dispute resolutions
  • Facilitating with voluntary disclosure to the RMCD
  • Controlling customs GST closure audit
  • Health checks

Customs Duties

Customs duties are levied on particular goods imported into or exported from Malaysia. However, the “principal customs area” in Malaysia is defined to exclude Labuan as per Customs Act 1967.

Businesses can experience notable compliance and administrative price while dealing with the RMCD for declaration of imports/exports.

Here are the list you will get more often with custom duties:

  • Applications for indirect tax relief and refund
  • Tariff classification and trade facilitation arrangements
  • Reviewing of transfer pricing and customs valuation
  • Controlling investigations and custom audits
  • Reviewing of transactions, agreements, and voluntary declarations, etc.
  • Preparing representations to RMCD for dispute resolutions and rulings

Excise Duties

Excise duty is a tax type imposed on the particular products imported  or manufactured in Malaysia. This duty is levied on the following:

  • Alcoholic drinks and beverages
  • Passenger vehicles
  • Tobacco items
  • & Playing cards

Furthermore, excise duty will also be imposed on sugar sweetened drinks and beverages with effect from 1 July 2019. 

All above products must be declared in customs import declaration Form No. 1 and the duty/tax assessed paid to the customs office. 

Any person that is producing excisable goods in Malaysia is required to register.

Here is the list of indirect tax services related to excise duty. 

  • Assistance to apply for licenses
  • Assistance to classify products
  • Assistance in setting up control framework for excise
  • Reviewing control framework for excise

We can provide a special team for indirect tax services in Malaysia that can help you with calculated strategies and implement changes to systems to ensure compliance.

*YH Tan & Associates PLT Only provides auditing, financial consultancy, and advisory services independently. Other services are provided by our independent associated partners. The above content is for information only.