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Key Indirect Tax Compliance Areas To Consider Before The Year Ends

29 December 2022

1. SERVICE TAX GROUP EXEMPTION FOR THE YEAR 2022

Companies providing / receiving intragroup services should ensure that the 5% de minimis rule is not breached to continue enjoying the service tax exemption on inter-company transactions.

 

2. SERVICE TAX – IMPORTED SERVICES

If the company has received taxable services from foreign service providers (e.g. management fees), please ensure that imported service tax has been accounted for.

 

3. SALES TAX EXEMPTIONS

Manufacturers subject to sales tax exemption should ensure that the quantities of raw material, components and packaging materials acquired / imported do not exceed the amounts prescribed in the respective sales tax exemption certificate (i.e. Item 1 Schedule C, Item 3 Schedule C, etc.).

 

4. APPLICATION FOR SALES TAX EXEMPTION, FOR THE YEAR 2023

Please be aware of the changes to the HS codes and introduction of new HS codes under “Perintah Duti Kastam 2022” effective from 1 June 2022 before applying for any Sales Tax Exemption for the year 2023.

 

5. SALES TAX ON IMPORTED GOODS – TRANSFER PRICING ADJUSTMENT

To look out for annual transfer pricing adjustment affecting the value of goods imported into Malaysia based on the Sales Tax and Customs Duty valuation rules.

 

6. SALES TAX ADJUSTMENT ON SALE OF MANUFACTURED GOODS – TRANSFER PRICING

To look out for annual transfer pricing adjustment affecting the sale value of manufactured taxable goods based on the Sales Tax valuation rules.

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