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Online shopping sites among digital services to be taxed under Malaysian government’s new plan

Tax to level the playing field between foreign and local Malaysian digital companies

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Foreign digital service providers will soon be taxed for their services in Malaysia as authorities look to amend several tax laws. Photo: AFP

By Aina Nasa

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Foreign digital service providers will soon be taxed for their services in Malaysia as authorities look to amend several tax laws.

Customs Department director-general Datuk T. Subromaniam said they were currently in talks with the Finance Ministry’s tax unit to tax these service providers to level the playing field between foreign and local digital economy players.

In terms of imposing the Goods and Services Tax (GST) on them, Subromaniam said it was a requirement to have a place of supply, which digital service providers do not have, thus the lack of tax imposed.

“Foreign digital service providers receive direct payment for their services but they are not taxed.

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“Once provisions are amended, we have a legal basis to tax them,” he said at the GST Conference 2017 here today.

He added that the process of amending several tax laws would kick off during the next Dewan Rakyat sitting in October.

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