8. Digital service tax briefcase

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Digital Service Tax

New service tax effectively come into operation on 1 January 2020.

Characterics

  • delivered or subscribed over the internet or other electronic network
  • delivered throught information technology medium (human eye cannot see and touch)
  • minimal or no human intervention (eg. automation, click to subscribe and consume)

Example

  • Software, application & video games
  • music, e-book and film
  • advertisement and online platform
  • search engine and social network (facebook)
  • database and hosting (eg. website hosting, online data, file sharing, cloud storage)
  • internet based telecommunication (eg. VOIP)
  • Online training
  • Subscription to online newspapers
  • payment process services (paypal)

Taxable Person

1. Foreign Service Provider (FSP)

  • any person who is outside Malaysia providing any digital service to a consumer directly
  • any person who is outside Malaysia operating an online platform for buying and selling goods
  • providing services (whether or not such person provides any digital services) who makes transactions for provision of digital services on behalf of any person

2. Threshold exceed RM500,000 (historical or future 12 months)

Accounting Basis

  • Default is Payment basis (same to service tax)
  • Allow to apply for Accrual Basis (billing).

Taxable Period

  • Three months (quarterly)

Exchange Rate

  • Can use any exchange rate to calculate tax payable

Returns Form

  • Digital Service Return (DST-02)

Exemption

  • No exemption is allowed

Claim Refund

  • Digital service tax overpaid allowed to claim refund.
  • Need fill-in JKDM-2.