Malaysia to apply SST on digital imports

2 September 2019

From 1 January 2020, the Malaysian tax authority confirmed that it would amend it’s current Sales and Service Tax (SST) legislation in order to apply SST to online services supplied by non-resident (foreign) companies.

At present, foreign businesses providing digital services in Malaysia do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage this gives to non-resident companies over Malaysian resident providers, the Malaysian government propose that SST at 6% will be charged on these types of transactions made to both businesses and to consumers.

This new obligation will be subject to an RM 500,000 registration threshold (approx. € 100,000) and will apply to a range of electronic services including: streamed games, music, apps, films, e-books, e-journals and internet services.