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Your Partner in GST
1. Introduction …………………………………………………
2. Why GST? …………………………………………………..
3. What is GST? ……………………………………………….
4. Proposed GST Model ……………………..……………..….
5. Responsibilities and Obligation of Registered Person ……
6. Conclusion ……………………………………………………
Content
3 - 4
5
6 - 8
9
10-13
14
ECOVIS AHL Tax Services Sdn. Bhd., 9-3, Jalan 109F, Plaza Danau 2, Taman Danau Desa, 58100 Kuala Lumpur, Malaysia
Phone: +60(3)7981 1799 Fax: +60(3)7980 4796 E-Mail: [email protected]
A member of ECOVIS International tax advisors accountants auditors lawyers in Argentina, Australia, Austria, Belarus, Belgium, Brazil,
Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Great Britain, Hong Kong,
Hungary, India, Indonesia, Ireland, Italy, Japan, Republic of Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Republic of Macedonia,
Malaysia, Malta, Mexico, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Russia, Serbia, Singapore, Slovak Republic, Slovenia,
Spain, Sweden, Switzerland, Taiwan, Tunisia, Turkey, Ukraine, Uruguay, USA (associated partners) and Vietnam
.
ECOVIS International is a Swiss association. Each Ecovis Member Firm is an independent legal entity in its own country and is only liable
for its own acts or omissions, not those of any other entity. ECOVIS AHL is a Malaysia Member Firm of ECOVIS International.
The above material is for business clients and associates. Whilst every care has been taken while compiling this material, we make no
representation or warranty (expressed or implied) about the accuracy, suitability, reliability or completeness of the information for any
purposes. Ecovis AHL, its employees accept no liability and disclaim all responsibility for the consequence of anyone acting in reliance to
the above information.
2www.ecovis.my
Your Partner in GST
GST now and forever!
The Malaysian Government has decided to implement the
Goods and Services Tax (GST), a broad-based consumption tax
to replace the current single-stage sales and services tax
effective from 1 April 2015.
With the implementation of GST coming nearer to our
doorsteps, businesses must now start to prepare and to equip
their people with GST knowledge despite facing with limited
resources and manpower. The countdown is started since 2014
& GST Budget tabled by our Prime Minister on 25 October
2013.
Malaysians shall know GST from now and forever…..
We have summarized the followings pertaining to GST as an
appetizer for your GST implementation full course menu in the
coming 16 months.
3www.ecovis.my
Your Partner in GST
Zimbabwe
Turkmen.UgandaUkraineCanadaCroatia
Uzbekistan
VanuatuVenezuela
Vietnam
Zambia
Portugal
Senegal
Luxembourg
Nicaragua
Sweden
No of Country
CountryTime Period
2000 - 2009
1990 - 1999
1980 - 1989
1970 - 1979
1960 - 1969
1948 - 1959 2France
P. N. Guinea
ParaguayPolandCzech RepFaroe Island
Romania
RussiaSamoa
Singapore
Slovakia
Mexico
Morocco
Honduras
Ireland
Germany
Rwanda
Namibia
T & TobagoTogo
ThailandTanzaniaTajikistanSwitzerlandRomaniaSri LankaS. AfricaSlovenia
Tunisia
Taiwan
Spain
Peru
Panama
Norway
Uruguay
Gambia
India
CameroonKazakhstanKenyaCyprusChinaKyrgyzstanLatviaLiechtensteinLithuaniaMadagascar
Turkey
Haiti
Hungary
UK
Bolivia
Chile
Ivory coast
Botswana
35
JamaicaCambodia
PakistanIcelandBurkina Faso
NigeriaGuineaBulgaria
NepalGhanaBenin
MozambiqueGeorgiaBelarus
MongoliaGabonBarbados
MoldovaFinlandBangladeshMauritiusFijiAzerbaijanMauritaniaEstoniaArmeniaMaltaEl SalvadorA l g e r i a
70
MaliEgyptAlbania
PhilippinesMalawiGuatemala
NigerJapanGreece 21New ZealandIndonesiaDom. Rep.
South KoreaEcuadorBelgium
ItalyCosta RicaAustria 20
IsraelColombiaArgentina
7NetherlandsDenmarkBrazil
Macedonia
St. Vincent
Eq. Guinea
Ant & BarbudaTongaCent. Af. RepSudan
SerbiaCape Verde
LesothoLebanonLaos
KosovoMontenegro
Guyana
Ethiopia
Bosnia Herz.
Dominica Isl.Belize Jordan
ChadAustralia
Most countries have implemented GST / VAT
Total country = 160
No threshold
Baht 1.8 mil
SGD 1 mil
Peso 1.5 mil
Lao Kip 400 mil
Riel 30 mil – 125 mil
Rupiah 600 mil
Registration Threshold(National Currency)
-10101999Vietnam
59,0001071992Thailand
782,000731993Singapore
34,00012101998Philippines
49,00010102009Laos
7,000 – 30,00010101999Cambodia
68,000 10101984Indonesia
Registration Threshold (USD)
Current Rate(%)
Initial Rate(%)
Year Country
VAT/GST in ASEAN countries
Malaysia 2015 6 N/A RM 500,000 150,000
(approximate)
Only Brunei, Malaysia and Myanmar have not implemented VAT/GST
Monaco
Isle of Man
MadeiraAzores
2010 - 2013 Saint Kitts and NevisRepublic of CongoDemocratic Republic
of the CongoGrenadaSeychelles
5
Burundi Iran
Jersey
Sierra Leone Guinea-Bissau Niue
4www.ecovis.my
Your Partner in GST
Part of the government’s tax reform programme to make it more efficient, effective,business friendly, transparent and capable of generating a more stable source ofrevenue
effective
• self policing
• able to address inherent weaknesses of the current sales tax and
service tax
efficient
• less bureaucracy
business friendly
• availability of various schemes
• reduce business cost
transparent
• You know you are paying tax
• Industries Guide
capable of generating a more stable source of revenue
• not susceptible to economy downturn
• depleting resource (petroleum)
5www.ecovis.my
Your Partner in GST
Goods and Services
Tax (GST)
Rate = 6 %
Threshold =
RM500,000
To replace current consumption tax
GST is charged on goods and services that are
● supplied in Malaysia (rental, sale of goods, advertisement etc.)
● imports
A consumption tax
In the form of value added at each stage of the
supply/distribution chain
GST on inputs is allowed to be offsetted against GST
on output .
5%, 6%, 10% & specific
rate
Various threshold
Sales Tax &
Service Tax (SST)
6www.ecovis.my
Your Partner in GST
Types of supply Output tax Input tax
Standard-rated 6% Claimable
Zero-rated 0% Claimable
Exempted No GST charged Not claimable
Manufacture
r claims back
GST
Manufacturer Wholesaler Retailer
Consumer
Consumer
pays
6%
GST only
Wholesaler
claims back
GST
Retailer
claims
back GST
GST AT 6%
1. Standard-Rated
Selling price : RM125
GST : RM7.50
Total selling price : RM132.50
Purchase cost : RM100
GST* : RM6
Purchase price : RM106
Delivery /
supply
chain
Manufacturer Wholesaler Retailer Consumer
Added Value : RM25
(Add GST : RM1.50)
Value-Adding
Activity
*Note: claim input tax credit
Example:
7www.ecovis.my
Your Partner in GST
Consumer
does not
pay any
GST
2. Zero-Rated
Manufacturer
claims back
GST
Manufacturer Wholesaler Retailer Consumer
Wholesaler
claims back
GST
Retailer
claims
back GST
GST AT 0%
3. Exempted
Supplier Private hospital Consumer
Supplier
claims tax
paid on input
Private hospital
cannot claim tax
paid on input
GST AT 6% NO GST
Consumer
does not
pay any
GST
8www.ecovis.my
Your Partner in GST
Agriculture products –
paddy & fresh vegetables
Foodstuff – rice, sugar,
table salt, plain flour,
cooking oil
Livestock supplies – meat,
muttons, swinePoultry & eggs
Fish, prawn, cuttlefish,
crabs, oyster, cockles, etc.
Supply of the first 200 units
of electricity to domestic
users
Supply of the first 35m³
of water to domestic users
Exported goods
and services
0% Zero-rate Supply
Exempt Supply
Rail Buses
Water transportation
Taxi/ Hired car
Highway toll
Residential property
Land for general use
Financial servicesPrivate health & education
GST
No GST on the supply of goods and services made by
Federal and State Government except certain services by
government department
● e.g. water supply and advertising
Statutory body and local authority in respect of its regulatory and
enforcement functions
Government Services
9www.ecovis.my
Your Partner in GST
http://gst.customs.gov.my/
1. Registration : GST Portal
2. Liability to Register
Mandatory
• Making taxable supply of goods and services in Malaysia
• Turnover exceeded the prescribed threshold
• Proposed turnover RM500,000.00
• Turnover is based on the total value of the taxable supplies for a 12
month period
Voluntary
• For businesses below threshold
• Must remain in the system for at least 2 years
10www.ecovis.my
Your Partner in GST
3. Accounting for GST
Sponsorship• Cash sponsor (donation) and grant
not subject to GST
• Sponsorship in kind or cash with benefit in return such as
advertising
subject to GST
Royalty
• Payment of royalty is considered as payment for a right to use the
intellectual property or trade mark
subject to GST
4. Responsibilities and Obligations
a) Issuance of tax invoice
b) Submission of returns
c) Payment of tax
d) Keeping of records
Deposit / Booking Fees• If it is part of payment, subject to GST
• If it is not part of payment, not subject to GST
• forfeited deposits or booking fees not subject to GST
Cancellation fees• not subject to GST
11www.ecovis.my
Your Partner in GST
a. Issuance of Tax Invoice
Types of tax invoice when making taxable
supplies
full tax invoice
simplified tax invoice
b. Submission of Tax Return
Taxable Period
12www.ecovis.my
Period Businesses Annual Turnover
Quarterly Basis Not exceeding RM5,000,000
Monthly Basis Exceeding RM5,000,000
Six Month Basis Special Case
Your Partner in GST
Sample Only
d. Keeping of Records
Records
Bahasa Malaysia or English
7 years
can be kept in soft or hard copy
to be kept in principal place of business
c. Claiming of Input Tax
Conditions:
Claimant must be a taxable person
Must have a valid tax invoice
Invoice issued under the name of the claimant
Goods and services acquired are not subject to any input taxrestriction e.g. motorcars
Goods and services are acquired for the purpose of makingtaxable supply
GST returns and payments must be submitted not later than the
last day of the month following the end of the taxable period
Electronic filing is encouraged
Net tax will be refunded within
14 working days for on-line submission
28 working days for manual submission
13www.ecovis.my
Your Partner in GST
Malaysian GST Model
The GST model has considered the welfare of the rakyat especiallythe lower income group
zero rating basic foodstuff, water and electricity
no GST on government services
exempting public transport, health, education, toll highway,financial and residential property
the proposed threshold exclude small businesses from GST net
The GST rate to be set at a relatively low rate to minimise GSTimpact on prices
Most of the zero-rated items – prices will be lower
14www.ecovis.my
Your Partner in GST
In view of the above, are you prepared for implementation?
For further clarifications please do not hesitate to contact us.
Ang Heng Ann (Tax) - [email protected]
Esther Choy (Business Development) - [email protected]
15www.ecovis.my
ECOVIS AHL Tax Services Sdn. Bhd., 9-3, Jalan 109F, Plaza Danau 2, Taman Danau Desa, 58100 Kuala Lumpur, Malaysia
Phone: +60(3)7981 1799 Fax: +60(3)7980 4796 E-Mail: [email protected]
A member of ECOVIS International tax advisors accountants auditors lawyers in Argentina, Australia, Austria, Belarus, Belgium, Brazil,
Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Great Britain, Hong Kong,
Hungary, India, Indonesia, Ireland, Italy, Japan, Republic of Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Republic of Macedonia,
Malaysia, Malta, Mexico, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Russia, Serbia, Singapore, Slovak Republic, Slovenia,
Spain, Sweden, Switzerland, Taiwan, Tunisia, Turkey, Ukraine, Uruguay, USA (associated partners) and Vietnam
.
ECOVIS International is a Swiss association. Each Ecovis Member Firm is an independent legal entity in its own country and is only liable
for its own acts or omissions, not those of any other entity. ECOVIS AHL is a Malaysia Member Firm of ECOVIS International.
The above material is for business clients and associates. Whilst every care has been taken while compiling this material, we make no
representation or warranty (expressed or implied) about the accuracy, suitability, reliability or completeness of the information for any
purposes. Ecovis AHL, its employees accept no liability and disclaim all responsibility for the consequence of anyone acting in reliance to
the above information.
Your Partner in GST