Foreign digital providers to pay 6% service tax

FOREIGN-registered digital service providers will be taxed 6% from next Jan 1 after Dewan Rakyat passed the Service Tax (Amendment) Bill 2019.

Deputy Finance Minister Datuk Amiruddin Hamzah said the move was to create a level playing field for service providers.

“It is not fair for the local service providers to be subjected to taxes but foreign providers are exempted from them.

Amiruddin said other countries had already started charging such service providers while some were in the midst of coming up with similar laws.

He noted that Norway charged 25% while Russia and New Zealand imposed 18% and 15% respectively.

“So Malaysia charging 6% isn’t a big deal,” he added.

On compliance, Amiruddin said he was confident that the providers would comply to safeguard their image, adding that there would be government-to-government cooperation to deal with the errant ones.

Other Bills that were passed included Customs (Amendment) Bill 2019, Excise (Amendment) Bill 2019, Free Zones (Amendment) Bill 2019 and Sales Tax (Amendment) Bill 2019.

Source : TheStar