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Service Tax Policy No. 2/2022: Service Tax Refund for Companies operating in the JDA

Malaysia-Thailand Joint Authority (MTJA)

Malaysia–Thailand Joint Development Area is a 7,250 km square area in the Gulf of Thailand which was created as an interim measure to exploit the natural resources in the seabed or continental shelf claimed by the two countries and to share the proceeds equally.

The arrangement does not extinguish the legal right to claims by both countries over the area.

This is one of the first applications of the joint development, a memorandum of understanding on 21 February 1979 in Chiang Mai, Thailand, for establishing the joint development area and authority to administer the area.

This was followed by an agreement to constitute the joint development authority on 30 May 1990 in Kuala Lumpur, Malaysia.

STP No. 2/2022

The Royal Malaysian Customs Department (RMCD) uploaded this STP (in Bahasa Malaysia) on its MySST website on September 8, 2022.

Under this STP, The Minister of Finance, following Section 34(3)(b) of the Service Tax Act 2018, has decided, with an effective date of 15 August 2022, that companies operating in the JDA are granted facilitation of service tax refund on all taxable services as listed in the Service Tax Regulations 2018, subject to the matter as prescribed in the STP.

Every three months (quarterly), an application for a service tax refund must be submitted to the Director General of Customs.

The application for refund claim should be submitted no later than the last day of the following month after the end of the 3 months as follows:-

There is no exemption for service tax on imported taxable services, including service tax on digital services, provided by a foreign registered person to the Malaysia-Thailand Joint Authority (MTJA) and companies operating in the JDA.

Following STP No. 2/2022, the exemption from the upfront service tax that had been granted before by STP No. 1/2021 will only be valid until August 14, 2022.

You are strongly encouraged to read STP No. 2/2022 in its entirety to obtain all of the relevant information:

166.1 Service Tax Policy No. 2_2022
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