Introduction
Service Tax Policy No. 1/2024, issued by the Royal Malaysian Customs Department on 28 February 2024, provides directives on the effective date for imposing service tax on new taxable services.
Purpose
The policy aims to establish the service tax implementation date for the new taxable services prescribed under the Service Tax Act 2018:
karaoke centre services,
maintenance & repair services,
non-financial brokerage & underwriting services, and
logistics services.
Key Points
The policy stipulates that the effective date for charging the increased 8% service tax rate on existing taxable services is 1 March 2024.
For registered persons providing the new taxable services, the implementation dates are 1 March 2024 for existing registrants, and 1 April 2024 for new registrants respectively.
Transitional exemptions from charging service tax are outlined for 26 February 2024 to 29 February 2024 and 26 February 2024 to 31 March 2024 accordingly.
Conclusion
In summary, the tax policy delineates the service tax commencement date for the new taxable services from the perspective of both existing and new registrants.
This grants industry-wide consistency in adopting the tax changes.
The policy also facilitates a smooth transition for businesses impacted by the expanded service tax scope. Reference: