GST zero rated

Wednesday 16th May 2018

The Goods and Services Tax (GST) will be zero-rated for all items and services in Malaysia from June 1 2018, the Finance Ministry announced today

The ministry said the GST will no longer be imposed at a rate of 6 per cent from then on, adding that this will be subject to further notice.

Accordingly, all registered merchants must comply with the imposition of the zero rate.

At the same time, registered traders are still subject to all current regulations set forth in respect of the issuance of tax invoices, tax returns within the prescribed periods of charge and input tax credit claims.

“Traders also need to ensure the price of goods and services that are set to comply with the Price Control and Anti-Profiteering Act 2011 at all times,” the statement said.

FAQs

Is the removal of GST in Malaysia considered GST abolished?

No. GST is still required, the announcement is to reduce GST charges from 6% to 0%. Businesses who are registered with GST will still need to provide tax invoices to their customers.

Are you still required to submit GST-03 form?

Yes. GST-03 form will still be required monthly or quarterly, according to your submission period.

The Royal Malaysian Customs Department FAQ states that Sales of goods/services at 0% from 1st June, 2018 onward is to be declared in column 10 in GST-03 form.

Do you change any tax code?

No. All tax codes remain unchanged, only the tax rate which currently is set at 6% is to be changed to 0% on 1st June, 2018 onward, including those that were manually maintained in the system by customers.

What should you do if your GST period is crossed over, e.g. April-June 2018?

You should change all GST tax codes from 6% to 0% on 1st June, 2018 onward.

Here are some scenarios of the taxable period that may run over:

Scenario 1:

Taxable Period March – May, submission will be in June and the GST Return will report all GST values for the 3 months at 6%.

Scenario 2:

Taxable Period April – June, submission will be in July and the GST Return will report only GST values for the first 2 months, April & May at 6%; and 0% for June.

Scenario 3:

Taxable Period May – July, submission will be in August and the GST Return will report only GST values for the first month, May at 6%; and 0% for Jun & July.

Scenario 4:

Taxable Period June – August, submission will be in September, if it is still required by then] but the GST values will all be at 0%.

Can you still claim April and May GST rebate?

Yes. If you are a GST registered person/business, you are eligible to claim input tax on purchases or expenses.

If your turnover is more than RM500k, do you need to register for GST?

Yes. The government announced to reduce GST from 6% to 0%. It is not a GST abolishment, hence you will still need to register GST for your business.

Do you need to change/upgrade your software?

No, Sage 300 users are able to change the tax rate from 6% to 0% easily. Click here to see how you can do this.



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