a) What is service tax on digital services (SToDS)?
Service tax that shall be charged and levied on any digital service provided by a foreign registered person (FRP) to any consumer in Malaysia.
Digital service means any service that is delivered or subscribed over the internet or other electronic network and which cannot be obtained without the use of information technology and where the delivery of the service is essentially automated.
Foreign registered person means any foreign service provider (FSP) who is registered under section 56C of the Service Tax Act 2018. (STA)
Consumer means any person who fulfils any two of the following:
i) Makes payment for digital services using credit or debit facility provided by any financial institution or company in Malaysia;
ii) Acquires digital services using an internet protocol address registered in Malaysia or an international mobile phone country code assigned to Malaysia;
iii) Resides in Malaysia
b) When is the tax due and payable?
The service tax on digital service chargeable under subsection 11(1) STA is due at the time when payment is received for the service provided to the consumer by the FRP. The Director General may allow FRP upon application in writing to account for tax on invoice basis
FSP who provides digital services to consumer in Malaysia and the value of digital service for a period of twelve months or less exceeds the threshold of RM500,000 is required to be registered under section 56B STA.
d) Taxable Period
Three months (quarterly).
[ 18/05/2020 ]
New service tax treatment on digital service provided to group of companies.