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Malaysia e-book GST rate debate

  • Feb 17, 2015 | Richard Asquith

Malaysia e-book GST rate debate

As Malaysia prepares for the introduction of a full Goods & Services Tax regime from 1 April 2015, there is still a debate as to whether e-books and printed books should enjoy a nil rate classification.

The proposed Malaysian GST rate is 6% for all taxable goods and services. Printed reference books, dictionaries and encyclopedias will be subject to a nil rating. Other books, including electronic books, will be at the standard rate. They were not subject to tax under the current Sales and Services Taxes.

This will create a problem since foreign e-book providers, such as Amazon Kindle, will not have to charge GST on their sales to Malaysian consumers.

EU VAT on e-books

In the European Union, under the terms of the EU VAT Directive, printed books may be classified at a reduced or nil rate. However, this does not extend to digital electronic books. However, countries such as Malta, Italy, France and Luxembourg have defied this position, and moved e-books to reduced rates. The European Court of Justice is challenging this position following a referral by the European Commission.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.