Tax & Revenue

Tax on Imported Online Services will be implemented in Stages

Date: 07 November 2018; Type: Legal News; Source: Bernama

PUTRAJAYA, Nov 7 (Bernama) - The process of implementing new taxes on imported online services will be carried out in stages, says the Ministry of Finance's National Budget Office Director Johan Mahmood Merican. He said the process would begin with imported online services in the business-to-business segment, followed by the business-to-consumer segment.

“This is to level the competitive playing field between local and international companies.

“As an example, US-based online video streaming company Netflix, which imports foreign content, is not taxed while local provider iflix has to pay taxes. This is unfair competition,” he told reporters after attending a special briefing on the Mid-Term Review of the 11th Malaysia Plan and 2019 Budget officated by Deputy Communication and Multimedia Minister Eddin Syazlee Shith here today.

He said at the start, the government would have engagements with online giants to get them to register with the Royal Malaysian Customs Department if they were interested to continue their services in Malaysia.

“Further details on the tax implementation, including the registration of companies providing imported online services, will be announced by the Customs Department,” he added.

Last Friday, Finance Minister Lim Guan Eng announced during the tabling of the 2019 Budget that for online services imported by consumers, the foreign service providers needed to be registered with the Customs Department, and charge and remit the relevant Service Tax on transactions with effect from Jan 1, 2020.

MY Bernama

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