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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.
Author

Yvonne Beh is a partner in the Tax 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 more than 10 years. In 2015, Yvonne was awarded Best in Tax at the Euromoney Asia Women in Business Law Awards, and more recently, being shortlisted again for the same award for 2016. Yvonne is recognized as a leading tax lawyer by industry publications, such as the International Tax Review ‘Women in Tax Leaders’ Guide and Asian Legal Business’ 40 under 40 (2016).

Author

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