VATLive > Blog > GST > Malaysia ratifies service tax on foreign digital services 2020

Malaysia ratifies service tax on foreign digital services 2020

  • Aug 9, 2019 | Richard Asquith

Malaysia has ratified the imposition of 6% sales tax on digitial supplies by non-resident providers to local consumers. Unusually, B2B transactions are included, but with relief on the use of reverse charge to prevent double taxation.

The new requirement to charge service tax on e-services (and goods) comes into play on 1 January 2020. Foreign providers can start registering online after 1 October 2019. There is a registration threshold of RMB500,000 per annum. Once registered, tax payers must submit quarterly returns by the end of the following month following the reporting quarter.

Malaysia has left the definition of digital services very vague and wide. So it will include: 

·     Streaming or downloads of media

·     Membership to online sites and clubs

·     E-books and audio books

·     Apps

·     Software

·     Cloud services, including memory

·     Online gambling

·     E-learning, excluding online access to live tutorials

·     Advertising services

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 can be contacted at: 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.
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