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Malaysian business requirements for GST

Malaysian business requirements for GST
16 Jan 2017

Malaysian businesses are required to register for GST when their turnover threshold hits RM500,000. In determining this threshold, income arising from the supply of capital assets of the business which was previously excluded will now fall within the RM500,000 threshold, unless the capital assets are supplied or transferred as a result of the cessation of the business.  

This means that a Malaysian business (which was previously not GST registered) that intends to sell an asset which is valued at RM500,000 or more must be GST registered before the sale is executed and account for GST on the sale.

It was also proposed that the GST treatment for free commercial zones and free industrial zones, which will now be collectively referred to as Free Zones, will be streamlined as follows: - 

  • GST will not be charged on the supply and removal of goods made within and between Free Zones 
  • GST will not be due on goods imported into a Free Zone except for goods imported to be used or consumed in the Free Zone 
  • GST will be suspended on the removal of goods from Free Zones to Designated Areas (i.e. Langkawi, Labuan and Tioman) and vice versa, and on the removal of goods from a free zone to an approved warehouse under the Warehousing Scheme, and vice versa. 

Your Taxand contacts for further queries are:
Brynner Chiam
T. + 603 2022 2999

Leow Mui Lee
T. +603 2032 2799

Your global tax partner

Taxand's Take

The above changes (among others) are expected to take effect from January 2017.

Taxand's Take Author

Leow Mui Lee

Section 385 regulations - is your business prepared?