fbpx

Malaysia will soon tax foreign providers of online services to level playing field

Foreign companies providing online services in Malaysia will soon have to pay a service tax, the Ministry of Finance confirmed on Wednesday (Nov 7).

Citing Johan Mahmood Merican, the director of the ministry’s National Budget Office, Bernama reported that the new taxes will affect business-to-business online services before hitting the business-to-consumer segment.

“This is to level the competitive playing field between local and international companies,” he is quoted as saying.

These foreign companies will be required to register with the Royal Malaysian Customs Department from now, The Star reported.

But Johan also said that not every foreign company in online services will be taxed, and that smaller companies will be exempt, The Star’s report said.

More details will be revealed at a later date, he added.

On Friday (Nov 2), Finance Minister Lim Guan Eng announced that imported services will be taxed starting Jan 1, 2020.

Source: BusinessInsider