Malaysia announces new digital tax from 2020

Malaysia officially becomes the second country in Southeast Asia to introduce a digital tax.

Nov 6, 2018

The Malaysian Ministry of Finance announced on Friday 2nd November 2018, that they are to officially become the second country in Southeast Asia to introduce a digital tax.

Malaysian finance minister Lim Guan Eng announced the changes during his 2019 Budget speech saying “For imported online services by consumers, foreign service providers will be required to register and remit related service taxes to the Malaysian customs, effective January 1, 2020.”

The new tax will be applicable in the areas of software, music, videos and digital advertising, similar to Singapore. The intention of the tax is to level the playing field for local service providers in the area of digital technology to fairly compete with foreign firms.

The specifics of the planned digital tax scheme, including rates, have not yet been announced.

 

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