Malaysia legislation
Section 37
Section 37
“Non-application of Part IX
The principal Act is amended by inserting after Part IX the following part:
“Part IXa
DIGITAL SERVICES
Imposition of service tax on digital services 56a. (1) Notwithstanding any provision of this Act, service tax shall be charged and levied on any digital service provided by a foreign registered person to any consumer.
(2)
The value of digital services on which the service tax is payable shall be the value charged by the foreign registered person.
(3)
Service tax on digital services shall be charged and levied at the rate fixed in accordance with subsection 10(2)
by reference to the value charged by the foreign registered person.
(4)
The service tax charged on the digital service provided to the consumer shall be due at the time when the payment for the digital service is received by the foreign registered person.
(5)
Any foreign registered person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Liability to be registered 56b. (1) The Minister may prescribe the total value of digital services for the purpose of registration of a foreign service provider under this Part.
Service Tax (Amendment)
(2)
Any foreign service provider who provides any digital service to a consumer is liable to be registered at the following time, whichever is the earlier:
(a)
at the end of any month, where the total value of all digital services provided by him in that month and the eleven months immediately preceding that month has exceeded the total value of the digital service prescribed under subsection (1); or
(b)
at the end of any month, where there are reasonable grounds for believing that the total value of all digital services provided by him in that month and the eleven months immediately succeeding that month will exceed the total value of the digital service prescribed under subsection (1).
(3)
The total value of all digital services provided by a foreign service provider to a consumer in the month and the eleven months immediately preceding that month referred to in paragraph (2)(a) shall be disregarded if—
(a)
the registration of the foreign service provider was cancelled, otherwise than under subsection 56f(3), during that period; and
(b)
the Director General is satisfied that before the registration of the foreign service provider was cancelled, the foreign service provider had given all information required by the Director General in order to determine whether or not to cancel the registration.
Application for registration of foreign service provider 56c. (1) Any foreign service provider who is liable to be registered under subsection 56b(2) shall apply to the Director
General for registration in the prescribed form not later than the last day of the month following the month in which he is liable to be registered as referred in paragraph 56b(2)(a)
or (b).
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(2)
Upon receipt of the application under subsection (1), the Director General may approve the registration from such date as he may determine and subject to such conditions as he deems fit.
(3)
The Director General shall register the foreign service provider under subsection (1) with effect from the first day of the month following the month in which the application under subsection (1) is made or from such earlier date as the Director General may determine but such date shall not be earlier than the date the foreign service provider becomes liable to be registered.
(4)
Any foreign service provider who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or to both.
Cessation of liability to be registered 56d. Any foreign registered person shall cease to be liable to be registered where—
(a)
the Director General is satisfied that he ceases to provide digital services; or
(b)
he has been registered under subsection 13(2) or (4).
Notification of cessation of liability 56e. (1) A foreign registered person who—
(a)
ceases to provide digital services; or
(b)
has been registered under section 13, shall notify the Director General in writing of that fact and the date of cessation within thirty days from the date of cessation.
Service Tax (Amendment)
(2)
Any foreign registered person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or to both.
Cancellation of registration 56f. (1) Where a foreign registered person makes a notification under section 56e, the Director General may cancel the foreign registered person’s registration from the date the foreign registered person ceased to be liable to be registered under section 56d or from such later date as the Director
General may determine if Director General is satisfied that the foreign registered person can be deregistered.
(2)
Where there is no notification made under section 56e and the Director General is satisfied that a foreign registered person has ceased to be liable to be registered under section 56d, the Director General may cancel the registration of the foreign registered person from the date the foreign registered person ceased to be liable to be registered under section 56d or from such later date as the Director General may determine.
(3)
Where the Director General is satisfied that on the day on which a foreign service provider was registered, such foreign service provider was not liable to be registered under section 56c or has ceased to be liable to be registered under section 56d, the Director General may cancel the registration of such foreign service provider with effect from the date as determined by the Director General in the notification in writing to such foreign service provider.
Issuance of invoice 56g. (1) Every foreign registered person who provides any digital service shall issue an invoice or a document containing prescribed particulars to the consumer in respect of the transaction.
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(2)
The invoice or document referred to in subsection (1)
may be issued electronically or in paper form.
(3)
Any foreign registered person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or to both.
Taxable period and accounting for service tax 56h. (1) The taxable period for a foreign registered person shall be a period of three months ending on the last day of any month of any calendar year.
(2)
A foreign registered person may apply in writing to the
Director General for a taxable period other than the period as determined under subsection (1).
(3)
The Director General may, upon receiving any application under subsection (2)—
(a)
allow the application and the taxable period shall be the period as applied for;
(b)
refuse the application and the taxable period shall remain as determined under subsection (1); or
(c)
vary the length of the taxable period.
(4)
A foreign registered person shall, in respect of his taxable period, account for the service tax due in a return as may be prescribed and the return shall be furnished to the Director General in the prescribed manner not later than the last day of the month following the end of his taxable period to which the return relates.
(5)
Where a taxable period has been varied under paragraph (3)(c) and notwithstanding subsection (4), the return shall be furnished not later than the last day of the month following the end of the varied taxable period.
Service Tax (Amendment)
(6)
The return referred to in subsections (4) and (5) shall be furnished whether or not there is service tax to be paid.
(7)
Any foreign registered person who—
(a)
contravenes subsection (4) or (5); or
(b)
furnishes an incorrect return, commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Payment of service tax 56i. (1) Any foreign registered person shall, in respect of the taxable period, pay to the Director General the amount of service tax due and payable not later than the last day of the month following after the end of his taxable period to which the return relates.
(2)
Where any service tax due and payable is not paid wholly or partly by the foreign registered person after the last day on which it is due and payable under subsection (1)
and no prosecution is instituted, the foreign registered person shall pay—
(a)
for the first thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), a penalty of ten per cent of the amount of service tax remains unpaid;
(b)
for the second thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax remains unpaid; and
(c)
for the third thirty-day period that the service tax is not paid wholly or partly after the expiry of the period specified under subsection (1), an additional penalty of fifteen per cent of the amount of service tax remains unpaid.
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(3)
Any foreign registered person who fails to pay the
Director General the amount of service tax due and payable under subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(4)
Subject to subsection (6), prosecution for the offence under subsection (3) may be instituted after the expiry of the period specified in paragraph (2)(c).
(5)
In addition to any fine imposed by the court under subsection (3), the court may order that any foreign registered person who is convicted for the offence under subsection (3)
to pay the penalty as specified in subsection (2).
(6)
No prosecution for the offence under subsection (3)
shall be instituted against the foreign registered person who has paid the amount of service tax due and payable and the penalty specified under subsection (2) within the period specified in subsection (2).
Duty to keep records 56j. (1) Every foreign registered person shall keep complete and true records written up to date of all transactions which affect or may affect his liability to service tax, including the following records:
(a)
all records of provision of digital service by the foreign registered person including invoices and receipts; and
(b)
all other records as the Director General may determine.
(2)
Any record kept under this section shall be preserved for a period of seven years from the latest date to which the record relates.
(3)
Where the record is in an electronically readable form, the record shall be kept in such manner as to enable the record to be readily accessible and convertible in writing.
Service Tax (Amendment)
(4)
A copy of the record shall be admissible in evidence in any proceedings to the same extent as the record itself.
(5)
Any foreign registered person who contravenes subsection (1), (2) or (3) commits an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Service of notice, etc., on foreign registered person 56k. Every notice, direction or any other document required by this Act to be served on a foreign registered person may be served by electronic service under section 87.”.
Amendment of section 65