Malaysia is implementing a GST system form April 2015.
Here below are the main points and how to implement this new tax in NetSuite.
- Notification & registration for GST is compulsory when more than RM500,000 of Revenues in Malaysia, in the past rolling 12 months.
- Businesses need to keep records for 7 years, including electronic records, physical books and details of the accounting system
Goods and services are categorized in several groups, the most important explained below.
- Taxable supply: taxed at 6% and at 0%
- Exempt supply (cannot charge or claim refund GST), disregarded supplies etc
Basically all goods and services, are at 6% if not specified at 0%.
Some 0%-rated supplies include:
Fruits, vegetables, unprocessed food-stuff, oils, rice, meat, fish etc; as well as water and electricity and exports items
Exempt supply examples are: land for residential use, public use, financial services, transportation (but domestic air travel is taxable), private schools
- GST input tax refund:
- tax credit against the output tax (6 years maximum)
- application online or paper-based
- refund online in 14 working days or 28 working days for paper
- some items can not be refunded:
- passenger motor car (including hiring)
- club subscriptions
- medical expenses
- family benefits
- medical and personal accident insurance
- entertainment expenses (except for employees and existing clients)
There are 2 types of tax Invoices, the general-use “full tax invoice” and the “simplified tax invoice” which is dedicated to sales to individuals.
- full tax invoice
- simplified tax invoice (for small transactions with private customers, with max refundable amount RM30)
The invoice date determines the time of supply.
In other important points:
- imported goods are subject to GST, the value including transport fees, custom duties etc
- services from suppliers abroad:
- self account and reporting from malaysian local customers
- deemed liable for input and output tax
- sundry items
- free goods and services provided to employees: input tax refundable if item if noted in employment contract, otherwise upper limit
- gifts: refundable but no GST charged if less than RM500 per fiscal year
- entities information: please enter your tax number in “company details”
- GST calculations are automated by item
- tax records from transactions are automated
- GST records: using the free bundle [International Tax Reports], it is possible to output the GST-03 report, and GST detail reports
- GST Audit file: using the free bundle [Tax audit file], it is possible to output Text and csv files.