SERVICE TAX ACT 2018

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 807 SERVICE TAX ACT 2018 As at 1 December 2024 This text is ONLY AN UPDATED TEXT of the Service Tax Act 2018 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT 2 SERVICE TAX ACT 2018 … … … … 24 August 2018 Date of publication in the Gazette … … … … 28 August 2018 Latest amendment made by Act A1719 which came into operation on … … … … 1 December 2024 Date of Royal Assent 3 LAWS OF MALAYSIA Act 807 SERVICE TAX ACT 2018 ARRANGEMENT OF SECTIONS P ART I PRELIMINARY Section 1. Short title and commencement 1 A. Territorial and extra-territorial application 2. Interpretation P ART II ADMINISTRATION 3. Functions and powers of Director General and other officers 4. Persons appointed or employed to be public servants 5. Recognition of office 6. Confidentiality of information P ART III IMPOSITION AND SCOPE OF SERVICE TAX 7. Imposition and scope of service tax 8. Taxable service 9. Determination of value of taxable service 10. Rate of service tax 11. Service tax due 4 Laws of Malaysia ACT 807 P ART IV REGISTRATION Section 12. Liability to be registered 13. Application for registration 14. Voluntary registration 15. Direction to treat persons as single taxable person 16. Registration of partnership 17. Registration of branches or divisions 18. Cessation of liability to be registered 19. Notification of cessation of liability 20. Cancellation of registration 20 A. Variation of registration P ART V ACCOUNTING, ASSESSMENT, RECOVERY, ETC. 21. Invoices 22. Production of invoices by computer 23. Credit notes and debit notes 24. Duty to keep records 25. Taxable period 26. Furnishing of returns and payment of service tax due and payable 26 A. Furnishing of declaration and payment of service tax due and payable by person other than taxable person 27. Power to assess 27 A. Offsetting unpaid tax against refund 28. Recovery of service tax, etc., as civil debt 29. Power to collect service tax, etc., from person owing money to taxable person or foreign registered person 30. Recovery of service tax before payable from persons about to leave Malaysia Service Tax Section 31. Recovery of service tax, etc., from persons about to leave Malaysia without paying service tax, etc. 32. Payment by instalments 33. Liability of directors, etc. P ART VI EXEMPTION, REFUND AND REMISSION 34. Power of Minister to exempt and refund 34 A. Refund by deduction of service tax 35. Claim for refund of service tax in relation to bad debt 36. Repayment of service tax in relation to bad debt 37. Payment of service tax, etc., short paid or erroneously refunded 38. Refund of service tax, etc., overpaid or erroneously paid 38 A. Refund of service tax, etc., to a foreign registered person 39. Deduction from return of refunded service tax 40. Remission of service tax, etc. P ART VII RULING 40 A. Non-application of Part VII 41. Public ruling 42. Customs ruling 43. Making of customs ruling 44. Amendment, modification or revocation of customs ruling 45. Director General to declare customs rulings to be null, etc. 46. Different customs rulings on same subject matter P ART VIII SPECIAL PROVISIONS RELATING TO DESIGNATED AREAS 46 A. Non-application of Part VIII 5 6 Laws of Malaysia ACT 807 Section 47. Interpretation 48. Taxable service provided within or between designated areas, etc. 49. Taxable service provided by person whose principal place of business located in designated areas 50. Taxable service provided to designated areas by registered person whose principal place of business located in Malaysia 51. Power of Minister to impose service tax P ART IX SPECIAL PROVISIONS RELATING TO SPECIAL AREAS 51 A. Non-application of Part IX 52. Interpretation 53. Taxable service provided within or between special areas, etc. 54. Taxable service provided by person whose principal place of business located in special areas 55. Taxable service provided to special areas by registered person whose principal place of business located in Malaysia 56. Power of Minister to impose service tax 56 A. (Deleted) P ART IXA DIGITAL SERVICES 56 A. Imposition of service tax on digital services 56B. Liability to be registered 56C. Application for registration of foreign service provider 56D. Cessation of liability to be registered 56E. Notification of cessation of liability 56 F. Cancellation of registration 56 G. Issuance of invoice 56 GA. Credit notes and debit notes 56H. Taxable period and accounting for service tax Service Tax Section 56 I. Payment of service tax 56J. Duty to keep records 56 K. Service of notice, etc., on foreign registered person P ART X ENFORCEMENT 57. Persons bound to give information 58. Access to places or premises 59. Access to recorded information or computerized data 60. Magistrate may issue search warrant 61. Search may be made without warrant 62. Seizure of goods, etc. 62 A. Power to seal 63. Power of arrest 63 A. Additional powers 63B. Powers of enforcement, inspection and investigation P ART XI TRIALS AND PROCEEDINGS 64. Jurisdiction to try offences 65. Evidence by certificate, etc. 65 A. Evidence of agent provocateur admissible 66. Obligation of secrecy 67. Protection of informers from discovery 68. Burden of proof 69. Court order 69 A. Imprisonment for non-payment of fine 70. No costs or damages arising from seizure to be recoverable unless seizure without reasonable or probable cause 7 8 Laws of Malaysia ACT 807 P ART XII GENERAL Section 71. Evasion of service tax 72. Giving incorrect information relating to liability to service tax 73. Improperly obtaining refund 73 A. Improperly obtaining deduction of service tax 74. Employee may transact business 75. Transaction of business on behalf of any person 76. Offences by authorized and unauthorized persons 77. Obstruction 78. Offences by company, etc. 79. General penalty 80. Compounding of offences 81. Review and appeal 82. Liquidator of company to give notice of winding up, and set aside service tax 83. Appointment of receiver to be notified to Director General 84. Registered person to submit audit certificate 85. Service tax, etc., to be payable notwithstanding any proceedings, etc. 86. Service of notices, etc. 86 A. Service of summons 87. Use of electronic service 88. Protection of officer of service tax from liability 89. Rewards 90. Power of Director General to charge fees 90 A. Power to extend period 90B. Power to modify terms and conditions 91. Power to make regulations Service Tax P ART XIII SAVINGS AND TRANSITIONAL Section 92. Registration on the commencement date 93. Progressive or periodic agreement 94. Rights granted for life 95. Things done in anticipation of the enactment of this Act 9 11 LAWS OF MALAYSIA Act 807 SERVICE TAX ACT 2018 An Act to provide for the charging, levying and collecting of service tax, and for matters connected therewith. [1 September 2018, P.U. (B) 508/2018] ENACTED by the Parliament of Malaysia as follows: PART I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Service Tax Act 2018. (2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different parts or different provisions of this Act. (3) Notwithstanding subsection (2), the Minister may, by notification in the Gazette, appoint the effective date for the charging and levying of service tax under this Act. Territorial and extra-territorial application 1A. (1) This Act and its subsidiary legislation shall apply both within and outside Malaysia. 12 Laws of Malaysia ACT 807 (2) Notwithstanding subsection (1), this Act and its subsidiary legislation shall apply to any person of whatever nationality or citizenship, beyond the geographical limits of Malaysia and the territorial waters of Malaysia, if the person— (a) is a foreign service provider; or (b) is registered under section 56C as a foreign registered person. Interpretation 2. (1) In this Act, unless the context otherwise requires— “this Act” includes any subsidiary legislation made under this Act; “goods” means all kinds of movable property; “service tax” means the tax payable under this Act; “prescribed” means prescribed by the Minister in the regulations made under this Act; “document” has the meaning assigned to it under section 3 of the Evidence Act 1950 [Act 56]; “licensed warehouse” means any warehouse or place licensed under section 65 of the Customs Act 1967 [Act 235]; “licensed manufacturing warehouse” means a licensed warehouse in respect of which an additional licence to carry on any manufacturing process has been granted under section 65A of the Customs Act 1967; “designated areas” means Labuan, Langkawi, Tioman, Pangkor and Pulau 1; “special areas” means any free zone, licensed warehouse and licensed manufacturing warehouse, the Joint Development Area, and a Service Tax 13 petroleum supply base licensed under section 77B of the Customs Act 1967; “Joint Development Area” has the meaning assigned to it under section 2 of the Malaysia-Thailand Joint Authority Act 1990 [Act 440]; “customs ruling” means any customs ruling made by the Director General under section 43; “Director General” means the Director General of Customs and Excise appointed under subsection 3(1) of the Customs Act 1967; “computer” has the meaning assigned to it under section 3 of the Evidence Act 1950; “Labuan” means the Island of Labuan and its dependent islands, namely, Rusukan Besar, Rusukan Kecil, Keraman, Burong, Papan and Daat; “Langkawi” means the Island of Langkawi and all adjacent islands lying nearer to Langkawi Island than to the mainland; “Minister” means the Minister charged with the responsibility for finance; “registered person” means a person registered under section 13 or 14; “foreign registered person” means any foreign service provider who is registered under section 56C; “taxable person” means a registered person or a person who is liable to be registered under section 12; “Pangkor” means the Pangkor Island, Mentagor Island, Giam Island, Simpan Island, Tukun Terindak Island, Pelanduk Island, Anak Pelanduk Island, Landak Island, Batu Orang Tua and Batu Jambal; 14 Laws of Malaysia ACT 807 “officer of service tax” means any officer of customs as defined in subsection 2(1) of the Customs Act 1967 and includes any person employed under subsection 3(3); “proper officer of service tax” means any senior officer of service tax or officer of service tax acting in the fulfilment of his duties under this Act, whether such duties are assigned to him specially or generally, or expressly or by implication; “senior officer of service tax” means any senior officer of customs as defined in subsection 2(1) of the Customs Act 1967; “foreign service provider” means any person who is outside Malaysia providing any digital service to a consumer and includes any person who is outside Malaysia operating an online platform for buying or selling goods or providing services (whether or not such person provides any digital service) and who makes transactions for provision of digital services on behalf of any person; “conveyance” includes any vessel, train, vehicle, aircraft or any other means of transport by which persons or goods can be carried; “consumer” means any person who fulfils any two of the following: (a) makes payment for digital services using credit or debit facility provided by any financial institution or company in Malaysia; (b) acquires digital services using