Malaysia is implementing a GST system from 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

malaysia tax invoice

  • simplified tax invoice (for small transactions with private customers, with max refundable amount RM30)simplifiedtaxinvoicemalaysia

 

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

 

In NetSuite:

  1. entities information: please enter your tax number in “company details”
  2. GST calculations are automated by item
  3. tax records from transactions are automated
  4. GST records: using the free bundle [International Tax Reports], it is possible to output the GST-03 report, and GST detail reports
  5. GST Audit file: using the free bundle [Tax audit file], it is possible to output Text and csv files.international tax report
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