Commencement of amendments to the Service Tax Act 2018
s 83
This Chapter comes into operation on 1 January 2019.
Finance Act 2018 chapter VII — AMENDMENTS TO THE SERVICE TAX ACT 2018
Amendment of section 2
s 84
The Service Tax Act 2018, which is referred to as the “principal Act” in this Chapter, is amended in section 2, by inserting after the definition of “taxable service” the following definition: ‘ “imported taxable service” means any taxable service acquired by any person in Malaysia from any person who is outside Malaysia;’.
Amendment of section 7
s 85
The principal Act is amended by substituting for section 7 the following section: “Imposition and scope of service tax 7. A tax to be known as service tax shall be charged and levied on— (a) any taxable service provided in Malaysia by a registered person in carrying on his business; or (b) any imported taxable service.”.
Amendment of section 9
s 86
Subsection 9(1) of the principal Act is amended— (a) in paragraph (b), by deleting the word “or” at the end of subparagraph (iii); (b) by substituting for the full stop at the end of paragraph (c) the words “; or”; and (c) by inserting after paragraph (c) the following paragraph: “(d) in the case of imported taxable service, the value of such imported taxable service shall be as prescribed.”.
Amendment of section 11
s 87
Section 11 of the principal Act is amended by substituting for subsection (1) the following subsection: “(1) The service tax chargeable under section 7, shall be due— (a) in the case of taxable service, at the time when payment is received for the service provided to the customer by the registered person; or (b) in the case of imported taxable service, at the time when the payment is made or invoice is received for the service, whichever is the earlier.”.
Amendment of section 24
s 88
Section 24 of the principal Act is amended— (a) in subsection (1)— (i) in paragraph (a), by deleting the word “and” at the end of that paragraph; and (ii) by inserting after paragraph (a) the following paragraph: “(aa) all records of imported taxable service; and”; (b) by inserting after subsection (5) the following subsection: “(5a) This section shall also apply to any person other than a taxable person who, in carrying on his business, acquires any imported taxable service.”; and (c) in subsection (6), by substituting for the words “or (4)” the words “, (4) or (5a)”.
New section 26a
s 89
The principal Act is amended by inserting after section 26 the following section: “Furnishing of declaration and payment of service tax due and payable by person other than taxable person 26a. (1) Any person other than a taxable person who, in carrying on his business, acquires any imported taxable service shall— (a) account for the service tax due in a declaration as may be prescribed and the declaration shall be furnished to the Director General; and (b) pay to the Director General the amount of service tax due and payable by him, not later than the last day of the month following the end of the month in which the payment on the service has been made by him or invoice is received by him. (2) Any person referred to in subsection (1) who— (a) contravenes subparagraph (1)(a); or (b) furnishes an incorrect declaration, commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both. (3) Any person referred to in subsection (1) who fails to pay to the Director General the amount of service tax due and payable under paragraph (1)(b) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both. (4) Where any service tax due and payable is not paid wholly or partly by any person referred to in subsection (1) after the last day on which it is due and payable under subsection (1) and no prosecution is instituted, the taxable person shall pay— (a) for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), a penalty of ten per cent of the amount of service tax which remains unpaid; (b) for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid; and (c) for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax which remains unpaid. (5) Subject to subsection (7), prosecution for the offence under subsection (3) may be instituted after the expiry of the period specified in paragraph (4)(c). (6) The court may order that the person referred to in subsection (1) who is convicted for the offence under subsection (3) to pay the penalty as specified in subsection (4). (7) No prosecution for the offence under subsection (3) shall be instituted against any person referred to in subsection (1) who has paid the amount of service tax due and payable, and the penalty specified under subsection (4) within the period specified in subsection (4).”.
Amendment of section 27
s 90
Section 27 of the principal Act is amended— (a) by substituting for subsection (1) the following subsection: “(1) Where— (a) any taxable person— (i) fails to apply for registration under section 13; (ii) fails to furnish a return under section 26; or (iii) furnishes a return which appears to the Director General to be incomplete or incorrect; or (b) any person other than a taxable person who, in carrying on his business, acquires any imported taxable service— (i) fails to furnish a declaration under section 26a; or (ii) furnishes a declaration which appears to the Director General to be incomplete or incorrect, the Director General may assess to the best of his judgment the amount of service tax due and payable, and the penalty payable under subsection 26(8) or 26a(4), as the case may be, if any, by the taxable person or person who is referred to in paragraph (1)(b) and shall forthwith notify him of the assessment in writing.”; (b) in the national language text, in subsection (2), by deleting the words “kena cukai”; (c) in paragraph (4)(a), by substituting for the words “paragraph (1)(a) or (b)” the words “subparagraph (1)(a)(i) or (ii); (d) in subsection (5)— (i) by substituting for paragraph (b) the following paragraph: “(b) in the case of a taxable person, within the taxable period during which the assessment could have been made, or in the case of the person referred to in paragraph (1)(b), within the period under subsection 26a(1),”; and (ii) by deleting the word “taxable”; and (e) in subsection (6), by substituting for the words “to any taxable person under subsection (1), (2) or (5), it shall be deemed to be an amount of service tax due and payable, and penalty payable, by him and may be recovered accordingly and the amount of service tax and penalty, if any, shall be paid by the taxable person, whether or not that taxable person” the words “pursuant to subsection (1), (2) or (5), it shall be deemed to be an amount of service tax due and payable, and penalty payable, by the person and may be recovered accordingly and the amount of service tax and penalty, if any, shall be paid by the person, whether or not that person”.
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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).
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