Netflix, Spotify and other digital service companies will be subject to 6% tax starting from 1stJanuary 2020
Bagi perkhidmatan atas talian yang diimport oleh pengguna, penyedia perkhidmatan asing akan dikehendaki berdaftar dengan Kastam, mengenakan dan meremit cukai perkhidmatan yang berkaitan berkuatkuasa mulai 1 Januari 2020.
— Ministry of Finance (@MOFmalaysia) November 2, 2018
Here we have gathered a few things that you need to know about this digital service tax, before it being officially enforced by the government next year.
1. It’s applicable to foreign digital platforms.
To any foreign digital company who operates an online platform to buy or sell goods online or offer digital service that can’t be obtained without the use of information technology.
2. First introduced in the Belanjawan 2019 (National Budget 2019)
It was announced by the Minister of Finance, Lim Guan Eng, last November without revealing the actual tax rate yet.
3. Digital Service Tax has been implemented in other countries as well.
Countries like Norway, Russia and New Zealand have higher rates compared to us.
4. It’s an extensive plan to the existing local digital services tax.
If you weren’t aware, local digital service companies such as Astro and iflix are required to pay for the digital service tax too.
5. There’s an amount required to be reached in order to register for the tax.
According to the tax expert Senthuran Elalingam, companies need to first look at the total annual fees received from Malaysian subscribers and if the amount exceeds RM500,000 then they are required to register for digital service tax.
6. Failures to register for the tax will be punishable by law.
Digital service companies who failed to abide the imposition of this new law can be fined up to RM50,000, imprisoned for a term of three years or more, or both, upon conviction.