Guide on Digital Services by Foreign Service Provider (FSP)

The Royal Malaysian Customs Department has released a version 2 of their guide on Digital Services. The guide aims to provide better understanding to professionals and businesses on  ''Digital Service'' tax. The guide contain the following information:-

• Implementation of Service Tax on Digital Services
• Who is considered as a FSP
• Who is considered as a consumer in Malaysia 
• Digital Services provided within the same group of company 
• Registration for FSP
• Issuance of Tax invoice for FSP
• Furnishing of returns
• Duty to keep records for FSP

Lochana Nanthacumar

Content Management Analyst

Wolters Kluwer Malaysia

(Note: For further information about our Sales and Service Tax (SST) subscription, contact us at my-sales@wolterskluwer.com (Malaysia).

Taxation On Digital Services

This article is written by Lee Hishamuddin and Gledhill (LHAG) and was first published in their SST e-Alert in October 2019. Reproduced with permission from LHAG.

Effective from January 2020, there will be a 6% of service tax imposed on digital services in Malaysia  for both local and foreign service providers in order to comply with Malaysia's new Sales and Service tax. The Royal Malaysian Customs Department (Customs) recently issued a Guide on Digital Service Tax (Guide) to assist FSPs. This alert highlights some of the key points that FSPs should consider in assessing their liability prior to the implementation.The service tax is also applicable to online platforms that carry out transactions on behalf of overseas service providers but do issue invoice or any other document under their name.