How to define imported services in GST?
Imported services are business services provided by all form of supply outside of Malaysia under Section 4 of GSTA. Imported service only applicable when the service is derived and consumed entirely in Malaysia.
According to Section 13 (4)(b) of the GSTA 2014, the time of supply of imported services shall be treated to have been made at the following dates whichever is the earlier:
The date when any payment is made by the recipient; or
The date when any invoice is issued by the supplier who belongs in a country other than Malaysia or who carries on business outside Malaysia.
How to account for GST?
If service is acquired from an overseas supplier, the recipient must account for output GST on the service consumed locally. This is known as the “Reverse Charge”, where the liability to account for output GST shifts from the supplier to the recipient.
If you are a GST registrant - declare GST through Form GST-03
If you are a non-GST registrant - declare GST through Form GST-04
The recipient of the imported service in Malaysia has to declare GST regardless whether they are GST registrant or non-GST registrant.
The term of ‘Withholding Tax’ is a tax collection measure on certain type of income whereby the payer is required to act as an agent to collect income taxes from non-residents who trade with Malaysia.
Income subject to withholding tax provision
Withholding tax is applicable to expenses and payment derived from Malaysia to non-resident whichever :-
Where withholding tax is applicable, the payer is required to remit the relevant amount to LHDN within one month from the date of payment or credited of such payment to the non-resident recipient. Failure to do so will be at risk of imposition of late payment penalty.
In addition, failure of remittance of withholding tax will cause the relevant expenditure to be disallowed as tax deduction under Section 39(1) of the ITA 1967.
From 17/1/2017 onwards, payments to non-resident as above-mentioned will be subject to withholding tax notwithstanding whether services are performed in or outside Malaysia. Due to the widening of the scope of withholding tax by LHDN, tax payers will now need to consider the impact of many off-shore services eg advertisement in Google Ads, Facebook. The responsibility now is on the tax payers to determine whether the services that they have obtained should be classified as technical services? Royalty? Or as others?
If you wish to understand more about the imported services and withholding tax, feel free to contact us at 03-8938 1773 or come visit us at our Sri Kembangan Office.
依据 2014 年消费税法令第 13(4)(b) 条文， 凡在计算销项税及索回进项税时都应需早于:-
任何接受进口服务的商家，必须根据外国供应商发出的发票，计算销项税及随后可索回的进项税， 但不必发出任何税务发票。这种处理方式称逆向收费机制 (Reverse Charge Mechanism)。
消费税注册商家 (GST Registrant) - 此项收费应需记录在 GST-03 表格里。
非消费税注册商家 (Non–GST Registrant ) - 此项收费应需记录在 GST-04 表格里，然后再提交及支付款项。
生效于17/01/2017，凡是支付非纳税居民并享用所提供服务，无论是在马来西亚境内、境外都必须缴纳预扣税款。由于内陆税收局把预扣税的税务范围扩大, 纳税人应重新考量离岸服务所带来的影响。纳税人有责任去判断他们所获得的服务应归纳成为哪个款项类型。例如：商家在Facebook刊登广告，由于Facebook属于非税务居民，所以必须缴交预扣税。因此纳税人必须判断此费用是属于哪个款项类型, 是不是技术性服务、特许权使用费还是其他收入？
03-8938 1773, 或到我们位于沙登的办公楼 。