Tuesday, 18 April 2017

The Tourism Tax Bill and Airbnb

The recent passing of the Tourism Tax Bill was met with much concern from various tourism industry players and netizens. Essentially the tourism tax bill imposes a tax that is levied on tourists staying at any accommodation made available by an operator.

Hamzah Rahmat, the president of the Malaysian Association of Tour and Travel Agents (Matta) was concerned with the impact on local tourism and hoped the government could provide more details. Mr Cheah Swee Hee, the president of the Malaysian Association of Hotels (MAH), argued that the tourism tax would create an uneven playing field, driving local and foreign tourists to accomodations such as those offered through Airbnb and unlicensed hotels, which aren’t regulated by the law. And of course, netizens cried foul over the expected increase in prices.

While unlicensed hotels are effectively illegal and should be shut down anyway, Airbnb services are a different kettle of fish.

Tuesday, 11 April 2017

GST Update - Challenging the Royal Malaysian Customs on Director General of Customs' Decisions

This article is reproduced with permission, from the March 2017 Client Alert of Wong & Partners, member firm of Baker & McKenzie International.


The Goods and Services Tax Act ("GST Act") 2014 came into force on 1 April 2015. Since its implementation almost 2 years ago, issues that surfaced in the early stages still remain with respect to the enforcement by the Royal Malaysian Customs Department ("Customs"), resulting in significant challenges for a number of taxpayers to comply with the GST requirements.

While Customs has made some effort to address some of the issues faced by taxpayers, the number of cases litigated on GST issues continues to rise.

Many of these issues pertain to differing interpretations of the GST Act, the role of guidelines ("Guidelines") and Director General's ("DG") Decisions issued by Customs, in aiding the interpretation of the law. Many aspects and details relating to the GST regime are not provided for expressly under the GST Act or subsidiary legislation, but are instead found in these various Guidelines and DG's Decisions. Are they absolute? Can they be challenged?

Wong & Partners have successfully represented clients before the GST Tribunal on this issue, and drawing from the Firm's experience, this client alert will focus on the viability of challenging the DG's Decisions.

Thursday, 30 March 2017

Are Malaysian companies being too laid back with MFRS 15?

I’ve been attending a few seminars recently in Malaysia on various current issues, such as the new Companies Act 2016, the Finance Act 2017 as well as transfer pricing developments. I was able to touch base with a few fellow delegates and we talked in general about the challenges facing their companies in this day and age. One topic that somehow kept being brought up was the implementation of MFRS 15 Revenue from Contracts with Customers.

I was rather astonished that most of their respective companies had not even started planning for it, despite the fact that we are now only nine months away. If you remember, MFRS 15 was originally slated to come into effect on 1 January 2017 before it got pushed back to 1 January 2018. Why was it pushed back? The International Accounting Standards Board acknowledged the complexity of the revenue standard and to allow more time for companies to properly implement it. Yet here we are, at the end of the first quarter of 2017, and many have still not started.

Thursday, 16 March 2017

GST Audit Frameworks and ‘Devices’ - The RMCD pushes on

The Malaysia GST environment continues to evolve, as the Royal Malaysian Customs Department (RMCD) pushes on in refining its rules, processes and policies. Budget 2017 saw various amendments to tighten up the GST Framework, dealing with such matters as the GST treatment with regards to free zones, the recovery of tax from persons leaving Malaysia, an increase in the penalty rate for unpaid taxes, and a change in definition on the time of supply for imported services.

Outside of Budget 2017, one of the more significant developments in the past year has been the GST Audit Framework document published June last year by the RMCD. GST audits has been a hot topic amongst accountants and tax agents of late, especially with the RMCD identifying 50,000 companies that will be subject to the first phase of GST audits.

The GST Audit Framework document discusses GST audits in detail, laying out key information such as the full process of the audit, documents required, and the rights and responsibilities of the auditee.

Wednesday, 8 March 2017

Will GST rates increase in Singapore?

The Singapore Budget 2017 debates continue to rumble on in Parliament, and should finish this Friday. There were many valid points raised and the discussion has been lively, and not without controversy.

For instance, one of yesterday's debates seemed to picture the Government indulging in evasive tactics when questioned about a possible GST hike in the near future. Low Thia Khiang, leader of the Workers' Party, voiced concern as to how would all the planned expenditure for healthcare and infrastructure in the coming years be funded.

Lawrence Wong, the second Minister for Finance, chose his words carefully in his response, and, while insisting that the Government is exploring all possible options, did not flat out dismiss the possibility of a GST rate increase.

Monday, 27 February 2017

Malaysia Master Tax Guide 2017 launched!

Any tax professional in the Malaysia tax scene will tell you that the Wolters Kluwer Malaysia Master Tax Guide is a must-have reference to deal with the ever-changing tax landscape. Well, the latest edition of our flagship product is now available for purchase!


Updated for all law changes up till 1 February 2017, this publication contains practical guidance on every aspect of the Malaysian tax regime that you need to know about.

Insights into the GST Appeal Process

This article was written by Datuk D P Naban and S Saravana Kumar.

This article was first published in the July 2015 issue of Tax Guardian, a publication of the Chartered Tax Institute of Malaysia and LHAG’s May 2016 issue of Legal Herald.

The much-anticipated goods and services tax (“GST”) replaced Malaysia’s sales and service tax in April this year. Under the new regime, all goods and services supplied in the country (unless they are zero-rated, exempt supply or out of scope) are subject to GST at the rate of 6% at every stage of the supply chain. Although GST is conceptually a simple consumption tax, confusion and uncertainty arising from the existing legislation (especially the wide zero-rated and exempt supply list) have made it a fairly complex tax in Malaysia.[1]

This is coupled with technical issues that will arise due to differing standpoints adopted by the Royal Malaysian Customs Department (“Customs Department”) and GST practitioners. The Goods and Services Tax Act 2014[2] (“the GST Act”) also contains a comprehensive penalty regime which, from its drafting and intent, may be read to be punitive in nature. During its roadshows nationwide, the Customs Department appeared to have assured businesses and GST practitioners that it would adopt an educational approach, at least in the first year of GST implementation, and, as such, the penalty provisions under the GST Act would be applied sparingly. This assurance is not legally binding and, in any event, the Customs Department is not estopped from applying the full strength of the law if it wishes to impose a penalty.[3]

This article will cover two major avenues of appeal available to taxpayers: the GST Appeal Tribunal and the judicial review application.