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In brief

Malaysia caught up with the global trend of taxing cross-border supplies of digital services by introducing a 6% service tax on imported digital services (SToDS), starting January 1, 2020. That said, unlike similar goods and services tax (GST) or value-added tax (VAT) regimes in other countries, the Malaysian SToDS regime imposes the tax on both individual and business consumers in Malaysia, which took most Malaysian businesses by surprise.

Business raised various concerns regarding the implications of the widening of the service tax net to capture cross-border supplies of digital services and the Malaysian government has since introduced measures to refine the SToDS regime in response to the concerns raised.

To read the rest of this article by Yvonne Beh and Justin Chong please go here. Topics covered are:

  1. Preventing Double Taxation
  2. Refund Mechanism for Local Service Providers
  3. Exemptions for Online Distance Learning Services and Online Newspapers, Journals and Periodicals
  4. Intra-Group Relief
  5. Collecting Information on “Consumers”
  6. Challenges Remain.

Yvonne Beh is a partner in the Tax, Trade and Wealth Management Practice Group of Wong & Partners. She has been advising on Malaysian tax laws and legal issues relating to corporate and commercial matters in Malaysia for over 15 years. Chambers Asia Pacific ranked her as a Band 3 practitioner for Tax in 2021, having previously listed her as Up and Coming in 2020. In the Chambers guide, clients commend her for having "a deep knowledge base" and is "responsive and available." Yvonne is further recognized as a Highly Regarded practitioner by the International Tax Review's Women in Tax Leaders guide and Indirect Tax Leaders guide. Yvonne won the Euromoney Asia Women in Business Law Awards for the Tax category in 2015 and 2017. She was also recognised in the Asian Legal Business’ 40 under 40 list of leaders in 2016. She is a frequent speaker at both domestic and international tax conferences and regularly contributes to the Bloomberg BNA’s Asia Pacific Focus Tax Planning newsletter, the VAT Navigator, as well as the Asia Pacific Tax Bulletin published by the International Bureau of Fiscal Documentation.


Justin Chong is an Associate in Baker McKenzie Kuala Lumpur office.