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Malaysia Imposes 6% DST on Non-resident Companies

Malaysia Imposes 6% DST on Non-resident Companies


Malaysia introduced a new digital services tax that took effect in January 2020. In a bid to increase the country’s revenue, a tax levy of 6% will need to be paid. 

The Definition of Digital Services in Malaysia

In Malaysia, the scope of e-services or digital services covers any service that is delivered or subscribed over the Internet or other electronic network, which cannot be obtained without the use of information technology and the delivery of the service is essentially automated. Furthermore, e services are services delivered through an information technology medium with minimal or no human intervention from the service provider.

How Does Malaysia Define a Consumer of Digital Services in Malaysia:

The Royal Malaysian Customs Department guide defines a consumer as any business or individual that fulfils any two of the following criteria:

  • Makes payment an FSP through a credit card or debit facility provided by a financial institution under the country’s Ministry of Finance;
  • Resides in Malaysia; or
  • Acquires the digital service through an internet protocol (IP) address registered in Malaysia.

More Details Concerning DST in Malaysia 

Date of Introduction: 1 January 2020

Type of tax: Value Added Tax

VAT Rate: 6%

Threshold: MYR500 000

Filing frequency/deadline: Quarterly – End of the month following the taxable period)

Client types: B2C & B2B

Local tax representative needed: No

VATGlobal is able to offer businesses any assistance with Malaysian VAT registration & compliance. To get in touch email us on info@vatglobal.com.

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