Registration of taxable person
(1) The registration of taxable persons under this Act shall be in accordance with the provisions of this Part and in the manner as may be prescribed.
(2) In this Part—
(a) references to supplies are references to supplies made in the course or furtherance of business;
(b) references to value of a supply of goods or services are references to value determined on the basis that no tax is chargeable on the supply or no flat rate addition is included in the consideration of the supply.
Liability to be registered
(1) The Minister may, by order published in the Gazette, specify the amount of taxable supply to give effect to the provisions of this section.
(2) Any order made under subsection (1) shall be laid before the Dewan Rakyat.
(3) Subject to subsections (5) and (6), any person who is not registered who makes any taxable supply is liable to be registered—
(a) at the end of any month, where the total value of all his taxable supplies in that month and the eleven months immediately preceding the month has exceeded the amount of taxable supply specified under subsection (1); or
(b) at the end of any month, where there are reasonable grounds for believing that the total value of all his taxable supplies in that month and the eleven months immediately succeeding the month will exceed the amount of taxable supply specified under subsection (1).
(4) Subject to subsections (5) and (6), where any business carried on by any taxable person is transferred to another person as a going concern under section 68 and the transferee is not registered at the time of the transfer, the transferee is liable to be registered at that time if—
(a) the total value of all his taxable supplies in the period of twelve months immediately preceding the time of the transfer has exceeded the amount of taxable supply specified under subsection (1); or
(b) there are reasonable grounds for believing that the total value of all his taxable supplies in the period of twelve months beginning from the time of the transfer will exceed the amount of taxable supply specified under subsection (1).
(5) In determining the value of any person’s supply for the purposes of paragraphs (3)(a) and (4)(a), any supply made at the time when he was previously registered shall be disregarded if—
(a) his registration was cancelled otherwise than under subsection 26(3); and
(b) the Director General is satisfied that before his registration was cancelled, he had given all the information required by the Director General in order to determine whether to cancel the registration.
(6) In determining the value of any person’s supplies for the purposes of subsections (3) and (4), the following supplies shall be excluded:
(a) supplies of goods that are capital assets of the business in the course or furtherance of which they are supplied or to be supplied;
(b) supplies of imported services;
(c) supplies made in accordance with the Warehousing Scheme under section 70;
(d) supplies made by a person who belongs in a country other than Malaysia or a recipient, in accordance with the Approved Toll Manufacturer Scheme under section 72; or
(e) supplies made within or between designated areas under section 155 except where such supply is subject to an order under subsection 160(1).
Notification of liability and registration
(1) A person who is liable to be registered under subsection 20(3) shall notify the Director General of the liability by applying to be registered in the prescribed form within twenty-eight days from the end of the month referred to in paragraph 20(3)(a) or (b), as the case may be.
(2) The Director General shall register any person who notifies his liability under subsection (1) with effect from the first day of the following month in which the twenty-eighth day falls or from such earlier date as may be agreed between the Director General and him but such date shall not be earlier than the date he becomes liable to be registered.
(3) A person who is liable to be registered under subsection 20(4) shall notify the Director General of the liability by applying to be registered in the prescribed form within twenty-eight days from the time when the business is transferred.
(4) The Director General shall register any person who notifies his liability under subsection (3) with effect from the date when the business is transferred.
(5) Where a taxable person fails to comply with subsection (1) or (3)—
(a) the Director General shall register him on the date as the Director General may determine but not earlier than the date his liability to be registered became known or made known to the Director General; and
(b) the person shall be liable to pay a late registration penalty as imposed by the Director General from the date he should have been registered to the date immediately before the date he is so registered and hereinafter referred to as late registration period.
(6) The late registration penalty and the late registration period referred to in subsection (5) shall be as prescribed and subject to an amount of not less than one thousand and five hundred ringgit for a period within thirty days and not exceeding an amount of twenty thousand ringgit for a period of more than three hundred and sixty days.
(7) References to registration in this Part are references to registration in a register kept with the Director General in the form as he may determine for the purposes of this Act.
Cessation of liability to be registered
(1) Subject to subsection (2), any taxable person shall cease to be liable to be registered at the end of any month where the Director General is satisfied that the value of all his taxable supplies in the period of twelve months then beginning, will not exceed the amount of taxable supply specified under subsection 20(1).
(2) A person shall not cease to be liable to be registered by virtue of subsection (1) where the Director General is satisfied that the reason the value of all his taxable supplies will not exceed the amount of taxable supply specified under subsection 20(1) is that in the period in question he will cease making taxable supplies, or will suspend making them for a period of thirty days or more.
(3) In determining the value of any person’s supplies for the purposes of subsection (1), the following supplies shall be excluded:
(a) supplies of goods that are capital assets of the business in the course or furtherance of which they are supplied or to be supplied;
(b) supplies of imported services;
(c) supplies made in accordance with the Warehousing Scheme under section 70;
(d) supplies made by a person who belongs in a country other than Malaysia or a recipient, in accordance with the Approved Toll Manufacturer Scheme under section 72; or
(e) supplies made within or between designated areas under section 155 except where such supply is subject to an order under subsection 160(1).
Direction to treat persons as a single taxable person
(1) Without prejudice to section 20, where the Director General is satisfied that any separation of business activities is artificial resulting in an avoidance of tax, he may make a direction directing that the persons named in the direction be treated as a single taxable person carrying on the activities of the business described in that direction and that single taxable person shall be liable to be registered with effect from the date specified in the direction.
(2) For the purposes of subsection (1), in determining whether any separation of business activities is artificial, regard shall be had to the extent to which the different persons carrying on those business activities are closely bound to one another by financial, economic and organizational links.
(3) The Director General may make a direction naming any person if the Director General is satisfied—
(a) that the person is making or has made taxable supplies;
(b) that the activities in the course of which the person makes or has made those taxable supplies form only part of certain activities in the business and that the other activities in that business whether or not they are similar to the activities carried on by that person are being carried on concurrently or previously, or both, by one or more other persons; and
(c) that if all the taxable supplies made in that business were taken into account, the person carrying on that business would, at the time of the direction, be required to be registered by virtue of section 20.
(4) Any direction made shall be served on each of the persons named in it.
(5) Where, after a direction had been given under this section by specifying a description of the business, it appears to the Director General that any person who has not been named in that direction is making taxable supplies in the course of activities which should be regarded as part of the business activities, the Director General may make and serve on that person a supplementary direction referring to the earlier direction and the description of business specified in it, and adding that person’s name to those of the persons named in the earlier direction with effect from—
(a) the date on which that person began to make the taxable supplies; or
(b) the date specified in the earlier direction in which the single taxable person referred to is registered under subsection (1),
whichever is the later.
(6) Where, immediately before any direction, including a supplementary direction, is made, any person named in the direction is registered in respect of taxable supplies made by him as specified in subsection (3) or (5), his registration shall be revoked by the Director General with effect from the date the single taxable person is registered under subsection (1) and upon the revocation of his registration, he together with all the persons named in the direction shall be treated as a single taxable person under this section.
(7) In relation to a business specified in a direction, the persons named in the direction together with the person named in the supplementary direction relating to that business being the persons who together are to be treated as a single taxable person are referred to as “the constituent members” in subsections (8) and (9).
(8) Where any direction is made under this section—
(a) the single taxable person carrying on the business specified in the direction shall be registered in the name to be jointly nominated by the persons named in the direction by notice in writing given to the Director General not later than fourteen days after the date of the direction or, in default of the nomination, in the name as may be specified in the direction;
(b) any taxable supply made by one of the constituent members in the course of the activities of the single taxable person shall be treated as being a taxable supply made by the single taxable person;
(c) each of the constituent members shall be jointly and severally liable for any tax due and payable by the single taxable person;
(d) without prejudice to paragraph (c), any failure by the single taxable person to comply with any requirement imposed by or under this Act shall be treated as a failure by each of the constituent members severally; and
(e) subject to paragraphs (a) to (d), the constituent members shall be treated as a partnership carrying on the business of the single taxable person and any question as to the scope of the activities of that business at any time shall be determined accordingly.
(9) Where it appears to the Director General that any person who is one of the constituent members should no longer be regarded as such for the purposes of paragraphs (8)(c) and (d) and the Director General gives notice in writing to that effect, that person shall not have any liability by virtue of those paragraphs for anything done after the date specified in that notice and accordingly on that date he shall be treated as having ceased to be a member of the partnership referred to in paragraph (8)(e).
Voluntary registration
(1) Where any person who is not liable to be registered satisfies the Director General that he is carrying on a business and he—
(a) makes a taxable supply including a taxable supply which is disregarded under this Act; or
(b) intends to make a taxable supply, in the course or furtherance of that business, the Director General may, if the person applies in the prescribed form and subject to such conditions as the Director General deems fit to impose, register the person from such date as the Director General may determine and the person shall remain registered for a period of not less than two years or such other shorter period.
(2) Where any person who is not liable to be registered satisfies the Director General that he is carrying on a business and he—
(a) makes a supply outside Malaysia which would be a taxable supply if made in Malaysia; or
(b) intends to make a supply outside Malaysia which would be a taxable supply if made in Malaysia,
in the course or furtherance of that business, and in either case he—
(a) has a business establishment in Malaysia or his usual place of residence is in Malaysia; and
(b) does not make and does not intend to make a taxable supply in Malaysia,
the Director General may, if the person applies in a prescribed form and subject to such conditions as the Director General deems fit to impose, register the person from such date as the Director General may determine.
(3) The Director General may cancel the registration of a person under paragraph (1)(b) or (2)(b) if he does not begin to make a supply by the intended date in his application or if he is in breach of any condition imposed under subsection (1) or (2).
(4) The Director General may refuse any application for registration made under subsection (1) or (2) as he deems fit.
Notification of cessation of liability or voluntary registration
(1) A person registered under section 21 or subsection 24(1) who ceases to make or ceases to have the intention of making a taxable supply shall notify the Director General in writing of that fact and the date thereof within thirty days from the date of cessation or intention to cease.
(2) A person registered under subsection 24(2) who—
(a) ceases to make or ceases to have the intention of making a supply outside Malaysia which would be a taxable supply if made in Malaysia; or
(b) makes or intends to make a taxable supply in Malaysia,
shall notify the Director General in writing of that fact and the date thereof within thirty days from the date of the occurrence.
(3) Any person who contravenes subsection (1) or (2) commits an offence.
Cancellation of registration
(1) Where a registered person makes a request in writing to cancel his registration or makes a notification under section 25, the Director General may cancel the person’s registration from such date as the Director General may determine if he is satisfied that the person can be deregistered.
(2) Where the Director General is satisfied that a registered person has ceased to be registrable, the Director General may cancel his registration with effect from the day on which he ceased to be registrable or from such later date as the Director General may determine.
(3) Where the Director General is satisfied that on the day on which a registered person was registered he was not registrable, the Director General may cancel his registration with effect from the date of notification in writing by the Director General.
(4) For the purposes of this section, “registrable” means liable to be registered under section 20 or eligible to be registered under section 24.
Group registration
(1) Two or more companies are eligible to be treated as members of a group if they satisfy the conditions as may be prescribed.
(2) Members of a group may apply in the prescribed form to the Director General to be treated as a group and every member shall, in that application, nominate a member to be their representative member.
(3) The Director General may, as he deems fit, approve or refuse any application made under subsection (2) and upon approval, impose conditions.
(4) The Director General may, as he deems fit, refuse to register the member nominated by the members of the group as the representative member.
(5) The registration of a group shall be in the name of the representative member.
(6) Where companies have been treated as a group—
(a) any taxable supply of goods or services by a member of the group to another member of the group shall be disregarded;
(b) any taxable supply of goods or services by or to a member of the group shall be treated as a supply by or to the representative member;
(c) any business carried on by a member of the group shall be treated as carried on by the representative member; and
(d) any importation of goods or supply of imported services by any member shall be treated as being imported by the representative member and any tax paid or due and payable by a member of the group on the importation of goods or supply of imported services shall be treated as paid or due and payable by the representative member.
(7) All members of the group shall be liable jointly and severally for any tax due and payable by the representative member.
(8) The Director General may cancel the registration of a group or terminate the treatment of a company as a member of a group as he deems fit.
Registration of partnership
(1) The registration—
(a) of persons carrying on a business in a partnership shall be in the name of the firm; and
(b) of the same persons carrying on separate businesses in a partnership may be in the separate names of the respective firms.
(2) In determining whether goods or services are supplied to or by the persons referred to in subsection (1), no account shall be taken of any change in the partnership.
(3) Any person who ceases to be a partner in a partnership shall—
(a) notify the Director General in writing of the date of cessation within thirty days from the date of cessation; and
(b) pay for the proportion of the partnership’s liability on any tax due and payable on any supply of goods or services by the partnership until the date of cessation.
(4) Where any person ceases to be a partner in a partnership during any taxable period or is treated as so doing by virtue of subsection (3), any notice, whether of assessment or otherwise, which is served on the partnership and relates to the taxable period or to any other taxable period during the whole or part of which he was a partner in the partnership, shall be deemed as to have been served also on him.
(5) Notwithstanding any written law to the contrary, any notice, whether of assessment or otherwise, which is addressed to a partnership by the name in which it is registered under this Act, and is served in accordance with this Act shall be deemed as having been properly served on the partnership and accordingly, where subsection (4) applies, as having been properly served on any previous partner.
(6) Subsections (1) and (4) shall not affect the extent to which, under any other written law, a partner is liable for tax owed by the firm.
(7) Where a person is a partner in a firm during part only of a taxable period, his liability for tax on any supply of goods or services by the firm during the taxable period shall be the proportion of the firm’s liability as may be just.
(8) Where any notice is required to be given by a partnership under this Act, it shall be the joint and several liability of all partners to give the notice, except that if a notice is given by any one partner, it shall be regarded as sufficient compliance with the requirement.
(9) Any person who contravenes paragraph (3)(a) or (b) commits an offence.
(10) For the purposes of this section, a partnership excludes a limited liability partnership.
Registration of societies or similar organization
(1) The registration of any society or similar organization may be in the name of the society or similar organization and in determining whether goods or services are supplied to or by the society or similar organization, no account shall be taken of any change in its members.
(2) Where anything is required to be done under this Act by or on behalf of the society or similar organization, the affairs of which are managed by a committee, or committee of its members, it shall be the joint and several responsibility of—
(a) every member holding office as president, chairman, treasurer, secretary or any similar office; or
(b) in default of any such member, every member holding office as a member of a committee,
except that if it is to be done or done strictly by any official or committee member, it shall be regarded as sufficient compliance with the requirement.
Registration of branches or divisions
(1) Where any business of a taxable person is carried on by one or more branches or divisions, that taxable person may apply for registration in the prescribed form to the Director General for any of the branches or divisions to be registered in the name of the branch or division.
(2) The Director General may approve an application made under subsection (1) subject to such conditions as he deems fit to impose if he is satisfied that the taxable person has fulfilled the following requirements:
(a) the taxable person and all of the branches or divisions make wholly taxable supplies;
(b) the taxable person is not a member of a group under section 27;
(c) it is likely to cause real difficulty for the taxable person to submit a single return in respect of all the branches or divisions but for the separate registration;
(d) each branch or division maintains a separate account in respect of its activities;
(e) each branch or division is separately identifiable by reference to the nature of the activities carried on by or the location of the branch or division; and
(f) each branch or division has the same taxable period.
(3) The Director General may, at any time by notice in writing to the registered person, cancel the registration approved under subsection (2) in respect of any or all of the branches or divisions if he is satisfied that—
(a) the registered person has failed to comply with any condition imposed by the Director General under subsection (2);
(b) any of the requirements referred to in subsection (2) has ceased to apply;
(c) the registered person has provided any false, misleading or inaccurate declaration or information in his application under subsection (1); or
(d) it is necessary for the protection of the revenue.
(4) Where the Director General cancels the registration in accordance with subsection (3), it shall have effect from the date of the cancellation as the Director General may determine.
(5) Subject to subsection (6), the taxable person may apply in writing to the Director General for any branch or division separately registered under subsection (2) to cease to be so registered, and the Director General may cancel the separate registration with effect from the date of application or from such later date as the Director General may determine.
(6) A taxable person registered under subsection (2) shall remain registered for a period of not less than two years or such other shorter period as the Director General may determine.
Personal representatives deemed to be taxable persons
(1) Where a taxable person—
(a) dies;
(b) goes into liquidation or receivership;
(c) becomes bankrupt; or
(d) becomes incapacitated,
the Director General may deem any personal representative carrying on the business in the interim to be a taxable person from the date the personal representative takes over until the time when a person is registered in respect of the business or in the case of incapacity, until the time as the incapacity ceases.
(2) Any requirement to pay tax on the personal representative carrying on the business referred to in subsection (1) shall apply to him to the extent of the assets over which he has control.
(3) The personal representative carrying on the business referred to in subsection (1) shall, within twenty-one days commencing to do so, notify in writing to the Director General of that fact and of the date of the death, liquidation, receivership, bankruptcy or the nature of the incapacity and the date on which it began.
(4) Notwithstanding any written law to the contrary, the personal representative carrying on the business referred to in subsection (1) shall, before disposing any of the assets of that taxable person, set aside a sum out of the assets as appears to the Director General to be sufficient to pay for any tax and penalty, if any, that is or will thereafter become due and payable or payable, as the case may be, in respect of any taxable supply of goods or services that have been supplied by that taxable person before the personal representative is deemed to be a taxable person carrying on the business in the interim and the personal representative shall pay for the tax and penalty.
(5) The personal representative carrying on the business referred to in subsection (1) who fails to comply with subsection (4) shall be personally liable to pay for the tax or penalty, that is or will thereafter become due and payable or payable, as the case may be.
(6) Where two or more personal representatives carry on the business referred to in subsection (1), the obligations and liabilities of the personal representatives shall be attached to all of them jointly and severally, subject to a right of contribution between themselves as in cases of contract.
(7) Any person who contravenes subsection (3) commits an offence and shall, on conviction, be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Exemption from registration for persons making or intending to make zero-rated supply
(1) Notwithstanding any provision of this Act, where any person who makes or intends to make a taxable supply satisfies the Director General that the supply is a zero-rated supply, the Director General may, if he deems fit and on that person’s request, exempt the person from registration until the exemption is withdrawn.
(2) Where there is a change in the nature of the supply made by the person exempted from registration under subsection (1), he shall notify in writing to the Director General of the change within thirty days from the date on which it occurred.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
