Goods & Services Tax (GST)
Goods and Services Tax (GST) which is also known as VAT or the value added tax in many countries is a multi-stage consumption tax on goods and services. Malaysia is implementing GST since 1st April 2015 and that will cause indirect impact on local business which includes inflation and new compliance requirement.
GST is a broad based consumption tax covering all sectors of the economy (i.e all goods and services made in Malaysia) including imports except specific goods and services which are categorized under zero rated supply and exempt supply orders as determined by the Minister of Finance and published in the Gazette.
GST can only be levied and charged if the business is registered under GST. A business is not liable to be registered if its annual turnover of taxable supplies does not reach the prescribed threshold (e.g. RM500,000 yearly). Therefore, such businesses cannot charge and collect GST on the supply of goods and services made to their customers. Nevertheless, businesses can apply to be registered voluntarily.
Excise duty is a type of tax imposed on certain goods imported into or manufactured in Malaysia. The goods subjected to excise duty are:
- Cigarettes, tobacco and tobacco products.
- Motor Vehicles.
- Playing cards (Playing Cards).
- Mahjong tiles.
All above goods have to be declared in customs import declaration Form No. 1 and the duty / tax assessed paid to the customs office where goods are released from customs control.
Customs duty is a tax levied on imports by the customs authorities of a country to raise state revenue, and/or to protect domestic industries from more efficient competitors from abroad.
In Malaysia, all goods dutiable on import are put through customs duty according to Customs Duties Order, 1996. The types of duties are import duty, sales tax, and export duty. The duty rates depend on the types of goods imported or exported.
Stamp Duty is levied on instruments of transfers; this may include the transfers of real property, mortgages on real property and transfers of marketable securities. Rates vary from 1- 3 percent of the value of a property and 0.3 percent on share transaction documents.
Stamp duty on share transactions – for listed shares traded on Bursa Malaysia, the rate is capped. Exemptions may be available where assets are transferred under a restructuring of a company or assets are transferred within certain categories of company groups.