The 2012 worldwide VAT, GST and sales tax guide

M ALAYSIA 429
services provided by one company to another company within the
same commercial group are not subject to service tax if certain
conditions are satisfied.
E. Time of supply
Sales tax. Sales tax is due on goods manufactured in Malaysia
when the goods are sold, used or disposed of by a taxable person.
The definition of “disposal” includes the manufacturer diverting
the goods to its own use, destroying the goods, giving away or
donating the goods, and making a supply of manufactured goods
for no consideration.
Imported goods. Sales tax is due for imported goods at the time
the goods are cleared by the Royal Malaysia Customs Department
or removed from a customs bonded warehouse.
Service tax. Service tax is due when payment is received for taxable
services rendered. If payment is not received within 12
months after the date of issuance of an invoice, the tax is due on
the day immediately after the expiration of the 12-month period.
F. Invoicing
Sales tax invoices. A licensed manufacturer is required to issue a
sales tax invoice for the sale of taxable goods. The invoice must
be in Malay or in English. The invoice must state the amount of
sales tax separately from the price for the goods.
Proof of exports. Exports of goods are exempt from sales tax. To
qualify for exemption, it must be proven that the goods have been
exported from Malaysia. Acceptable documentation includes a
customs export declaration and an export sales invoice issued by
a licensed manufacturer.
Service tax invoices. A licensed service provider is required to
issue a service tax invoice for the sale of taxable services. The
invoice must be in Malay or in English. The invoice must state
the amount of service tax separately from the price for the taxable
service.
G. Tax returns and payment
Sales tax. Sales tax returns are generally completed for twomonth
periods. The due date for the return and payment is the 28th
day of the month following the end of the return (taxable) period.
Taxable persons may agree with the tax authorities on different
sales tax accounting periods. A taxable person may also pay outstanding
sales tax, including a late payment penalty, in installments,
with the prior agreement of the tax authorities.
Sales tax penalties. A penalty of 10% of the tax due is assessed
for the late payment of sales tax. The amount of the penalty is
increased by an additional 10% for every 30-day period that the
tax remains unpaid, up to a maximum penalty of 50%.
Penalties are imposed for a range of offenses, including the failure
to apply for a sales tax license, the failure to charge sales tax,
errors in issuing invoices and the failure to maintain proper
accounting records. On conviction, an offender may be subject to
an imprisonment term not exceeding 12 months, a fine not
exceeding RM 5,000 or both.