sales tax 2018 services tax 2018 · 2018-10-31 · registration tax rate 6% 5%,10% or specific rate...
TRANSCRIPT
Sales Tax 2018
Services Tax 2018
Accounting Treatment and Impact to
Cooperative Business
PRESENTED BY:
TAQIYUDDIN AMINI ABDUL SATAR
PRESIDENT ICMA
Content
• Overview
• Scope
• Accounting for Tax – Sales Tax & Service Tax
• Furnishing SST02 and Payment
• Transitional issues – Preparations & Impacts
Overview : Comparison between GST and SST
Description GST Sales Tax Service Tax
Regulation GST Act 2014 Sales Tax Act 2018 Service Tax Act 2018
Tax system design Multi-tier Single-tier Single-tier
Registration tax rate 6% 5%,10% or specific rate 6% or specific rate
Registration threshold RM500,000 RM500,000 RM500,000 or RM1.5
million (F&B)
Scope of registrants All business making
taxable supplies except
business that make
wholly exempt supplies
All manufacturer & sub
contractors except those
eligible for sales tax
exemption
All service providers
providing prescribed
services
Registrant method MyGST – Tax Access
Point (TAP)
MySST system MySST system
Overview: Comparison between GST and SST
Description GST Sales Tax Service Tax
Accounting basis Accrual basis Accrual basis Payment basis
Scope of tax Taxable goods and
services consumed in
Malaysia & goods and
services imported into
Malaysia
Imported goods into
Malaysia and
manufactured goods in
Malaysia except with
sales tax exemption
Provision of taxable
services made by a
taxable person in
Malaysia.
Service tax is not
charged on imported
services.
Return submission Monthly, quarterly or
other taxable period
approved by DG
Bimonthly ( every 2
month )
Bimonthly (every 2
month)
Due date to submit tax
return & pay tax
1 month from end of
taxable period
1 month from end of
taxable period
1 month from end of
taxable period
Sales Tax 2018An Overview
Sales Tax LegislationAct• Sales Tax Act 2018
Regulations• Sales Tax Regulations 2018• Sales Tax (Customs Ruling) Regulations 2018• Sales Tax (Rules of Valuation) Regulations 2018• Sales Tax (Compounding of Offences) Regulations 2018
Order• Sales Tax (Amount Of Sale Value Of Taxable Goods Manufactured)
Order 2018 • Sales Tax (Rates Of Tax) 2018• Sales Tax (Goods Exempted From Sales Tax) Order 2018• Sales Tax (Person Exempted From Sales Tax) Order 2018• Sales Tax (Exemption From Registration) Order 2018• Sales Tax (Imposition of Tax In Respect Of Designated Areas) Order
2018• Sales Tax (Imposition Of Tax In Respect Of Special Areas) Order 2018 • Sales Tax (Appointment of Date of Coming Into Operation) Order 2018
Examples of Goods
Exempted From Sales TaxLive Animals
• Horses
• Fish
• Sheep and goats
Food items
• Rice
• Beef, mutton and chicken
• Seafood
• Fruits & vegetables
• Sardine
• Cooking oil
• Coffee
• Bread
Machinery
• Vending machine
• Escalator
• Industrial machine
Personal items
• Sanitary towels
• Deodorant
General goods
• Newspaper
• Books
Health
• Medicine
• Vitamin
• Hearing aids
• Pacemaker
Vehicle
• Motorcycle below 250cc
• Bicycle
• Baby carriages
Please refer Sales Tax (Goods Exempted From Sales Tax)
Order 2018 for the gazettes goods
No Sales TaxX
Examples of Taxable Goods
Processed Foods
• Biscuits
• Fruit juice
• Dry noodle
• Processed meat or fish
• Butter and margarine
Food items
• Chocolate
• Ice cream
• Natural honey
Furniture
• Sofa
• Mattress
• Table and chairs
Personal items
• Shampoo
• Toothpaste
• Shower gel
Electrical appliances
• Washing machine
• Television
• Electronic device
• Smart phones
• Computer devices
Tourist favourites
• Watches
• Camera
• Sun glasses
Other
• Engine oil for vehicle
• Brake fluid
• Tobacco products
Please refer Sales Tax (Goods Exempted From Sales Tax)
Order 2018 for the gazettes goods
Petroleum products
• Ron 97 and above
Persons Exempted From
Sales TaxMinister may exempt any person from payment of sales tax charged and levied on any taxable goods manufactured or imported
• Subject to conditions
• Approval on individual basis
Exemption by Sales Tax (Persons Exempted From Sale Tax) Order 2018
• Specific person or to class or category of person
• Specific taxable goods or class of taxable goods
• Subject to conditions specified in the Order
Registered manufacturer is exempted from charging and collecting sales tax due and payable on taxable goods sold to person granted exemption
Failure to comply with the conditions, sales tax becomes due & payable
No Sales TaxX
Sales Tax (Persons Exempted
From Sales Tax) Order 2018
SCHEDULE A SCHEDULE B SCHEDULE C
• Malay Rulers
• Federal & State
Government
• Airline
• Oil & Gas Industries
• Sub contractor
• Manufacturer: with
regards to
‣ goods used for
transportation
‣ repair of goods
• Manufacturer of
specific industries
eg. for
pharmaceuticals
products
• Controlled goods
under Control of
Supplies Act 1961
• Registered
Manufacturer
• Persons
import/purchase on
behalf of the
registered
manufacturer
No Sales TaxX
Sales Tax (Persons Exempted
From Sales Tax) Order 2018
No. Persons Goods Exempted
1 Any registered manufacturer Raw materials, components and packaging
materials excluding petroleum
2 Any registered manufacturer of
petroleum product
Raw materials, components and packaging
materials including petroleum to be used as raw
materials
3 Any person acting on behalf of
registered manufacturer
Raw materials, components and packaging
materials excluding petroleum
4 Any person acting on behalf of
registered manufacturer of
petroleum product
Raw materials, components and packaging
materials including petroleum to be used as raw
materials
5 Any registered manufacturer Semi-finished taxable goods for finished taxable
goods for subcontract work and subsequently
returned after completion of work
No Sales TaxX
Sales Tax (Persons Exempted
From Sales Tax) Order 2018
Service Tax 2018An Overview
Service Tax Legislations
Act• Service Tax Act 2018
Regulations• Service Tax Regulations 2018• Service Tax (Customs Ruling) Regulations 2018• Service Tax (Compounding of Offences) Regulations 2018
Order• Service Tax (Amount O f Value o f Taxable Service) Order
2018 • Service Tax (Rate Of Tax) Order 2018• Service Tax (Appointment of Date of Coming Into Operation)
Order 2018
Taxable Services
• Hotel
• Insurance and Takaful
• Service of food and beverage preparation
• Employment agency
• Security
• Management services
• Parking
• Motor vehicle service or repair
• Courier
• Hire and drive car
• Advertising
• Domestic flight except Rural Air Services
• Credit or charge card
• IT services
• Electricity
• Club
• Gaming
• Telecommunication
• Pay-TV
• Forwarding agents
• Legal
• Accounting
• Surveying
• Architectural
• Valuer
• Engineering
Management Services
• Provision of project management services
• Provision of services to manage training programs by third parties
• Secretarial services by the secretary of the company
• Provision of event management services
• Debt collection and receivables management services
• Warehousing management services including comprehensive
supplies recoupment activities, warehousing, maintenance, order,
packaging, delivery and etc.
• Building maintenance services
• Management services for admission of potential students from
overseas to higher education centers in Malaysia
• Provision of outsourced management services by third parties
• Provision of parking management services
• Provision of sports facilities management services
Accounting of Tax –
Sales Tax
Issuance of invoice
• Invoice to be issued pertaining to sale
• Shall contained prescribed particulars
• Bahasa Malaysia or English
• May be produced by computer
• Sales tax payable shall be collected by registered
manufacturer from the purchaser
Content of Invoice
The following particulars are required in the invoice:
• The invoice in serial number;
• The date of the invoice;
• Name, address and identification number of the registered manufacturer;
• The name and address of the person to whom the taxable goods is sold;
• Description and quantity of the goods
• For each description distinguish the type of goods, the quantity of goods or and
amount payable, excluding tax;
• Any discount offered;
• The total amount payable excluding tax, the rate of tax and the total tax
chargeable shown as a separate amount or total amount payable inclusive of
total tax chargeable
• Any amount expressed in a currency other than ringgit shall also be expressed in
ringgit at the selling rate of exchange prevailing in Malaysia at the time of sale.
Credit Note & Debit Note
A credit note is issued under the following situations:
• goods are returned by the purchaser due to wrong
quantity, poor or defective quality or uncontracted goods,
provided that the goods have not been subsequently sold
or disposed of by the purchaser
• discounts given in respect of goods sold and which are
freely available to all who are willing to conduct business
A debit note is issued under the following situations:
• there is an addition of sales tax to be paid for any price
adjustment
Credit Note & Debit Note
A credit note or debit note shall contain the following particulars:
• the words “credit note” or “debit note” in a prominent place
• the serial number & date of issue
• the name, address and ST identification number of the supplier
• the name and address of the customer
• the reason for issuance
• description which identifies the description of goods, the quantity
and amount for which CN or DN is given
• the total amount excluding tax
• the rate and amount of tax
• the number and date of the original tax invoice
Credit Note & Debit Note
If changes relates to amount of tax payable:
• adjustment in the return for the taxable period in which the credit note or debit note is issued
• adjustment in the return for the last taxable for person who has ceased to be a taxable person
If deduction for taxable period exceeds the amount of sales tax payable, the balance is to be carried forward to the next taxable period
Refund is not allowed on balance carried forward if taxable person has ceased to carry on business
Record keeping
• Bahasa Malaysia or English
• 7 years
• can be kept in soft or hard copy
• to be kept in Malaysia
Record keeping
Records relating to registration
• SKM records
Records relating business activities
• invoices, receipts,
• debit note, credit note
• delivery order, purchase order
• Bank slip, bank statement, voucher and etc.
• Contract, agreement
Records relating to accounting (hard copy)
• Financial statement – Profit & Loss, Balance Sheet, Trial Balance
• Account payable, account receivable, General ledger, Sales,
Purchase, stock, cash and etc.
Record keeping
Records relating to taxation
• Customs forms – K1, K2, K9 and etc
• SST returns, registration and etc
• Income tax declaration
Records relating to electronic form
• Accounting software manual
• Accounts chart, access code, program documentation
• Audit trail
• Purchase, Sales, GL Listing (e.g standard, exempt, disregard, out of
• scope, deemed supply etc)
• Management Information Report (MIS) report
• Other data / records keep in accounting / business software
Taxable Period
• Regular interval period where a taxable person accounts
and remits sales tax to the Government.
• The default taxable period for the registered
manufacturer to be bimonthly (2 months) period.
• Registered manufacturer may apply :
• for taxable period other than the default taxable period
Accounting of tax –
Service Tax
Accounting
Issuance of Invoices
• Mandatory for registered person who provides any taxable
services.
• Hard copy or electronically
• Containing prescribed particulars Bahasa Melayu or English
Credit Notes and Debit Notes
• only registered person is allowed to issue and receipt > shall
make an adjustment in his return
• shall contained the prescribed particulars.
Accounting BasisAccounting Basis• Service Tax
✦ Payment basis
• Service Tax required to be accounted:-✦ At the time when the payments is received✦ On the day following period of twelve month when any
whole or part of the payment is not received from the date of the invoice for the taxable service provided.
Taxable Period
• Bimonthly basis (every 2 months)
• Specific basis
Filing frequency Taxable period
First taxable period Sept - Oct 2018
Subsequent taxable period Nov - Dec, Jan - Feb, Mar - Apr, May - Jun, …….
Specific Basis subject to an approval from the DG
Service Tax Facility
Contra System
Registered person is allowed to deduct service tax in
his return for any cancellation and termination of
services or any other reasons such as reducing
premiums or discounts.
Bad Debts
Bad Debts Claim
• Can be claimed by a Registered person or a Ceased to be registered person.
• Can be claim after 6 months to 6 years from the date of service tax was paid
• Subject to conditions & satisfaction of the DG
Bad Debts Recovery
• Has claimed and received the refund
• Payment received from the debtor after bad debts claimed
• Repay to DG in his return
• Repay according to the formula
Furnishing SST-02 Return &
Payment Of TaxWhen to submit sales tax return* (SST-02) & payment of tax
• Normal period - not later than the last day of the month
following after the end of his taxable period
*Return shall be submitted whether or not there is tax to be paid
• Other period as approved by DG - not later than the last
day of the 30 days from the end of the varied taxable
period.
• Failure to submit return is an offence
Payment of tax
Payment for tax due & payable declared in SST-02
Payment of tax by registered manufacturer may be made
• by post to SST Processing Centre
• cheque, bank draft,
• by electronic means
• Internet banking, FPX (financial processing exchange)
Payment of tax
Payment made Penalty Total Penalty
On time or before due
dateNo penalty Nil
1 to 30 days after due
date10% 10%
additional 1 to 30 days 15% 25%
additional 1 to 30 days 15% 40%
more than 90 days after
due dateProsecution 40%
Transitional issues –
Preparations & Impact
Transitional issues from GST to SST
Preparation and critical issues to address
What business should do for GST transition to SST ?
• Look out for latest announcement on GST abolishment and final SST
model.
• Study and assess the impact of the proposed SST
Sales – pricing structure, review contract & sales processes
Purchase – supply chain, costs & review contract
Documentation, operation & administration
Transitional issues form GST to SST
Accounting & software to facilities SST implementation
Compliance of the proposed Sales Tax Act 2018 & Service Tax Act 2018
Legal e.g. Price Control & Anti-Profiteering Act 2011
Price Control & Anti-Profiteering ( Mechanism to determine unreasonably high
profit) regulations 2018 – comes into operations on 6 June 2018.
Transitional issues from GST to SST
Preparation and critical issues to address
Question
Do GST registered persons need to account for GST for goods
held in hand before effective date of SST ?
Answer
GST registered persons must account for GST at 0% and declare
output tax in their final GST-03 return.
Question
Goods removed and invoice issued before 1/9/2018. however, the
payment is made on 5/9/2018. what is the tax treatment ?
Answer
GST is charged at standard rate of GST 0% on value of goods
removed.
Transitional issues from GST to SST
Question
Full payment received on the removal of goods before 1/9/2018. However,
goods only removed on 3/9/2018. What is the tax treatment ?
Answer
Sales tax of 10% is charged on the value of goods removed.
Questions
Sub-contract work to be performed from 15/8/2018 to 14/9/2018. What is
the tax treatment ?
Answer
GST is charged at standard rate of GST 0% for part of the work performed
until 31/8/2018. the balance of work to be performed from 1/9/2018
onwards shall be charged sales tax of 10%.
Transitional issues from GST to SST
Preparation and critical issues address
Question
What is the SST treatment on goods delivered after 1/9/2018 and payment
received or tax invoice was issued during tax holiday i.e. GST at 0% ?
Answer
You must account for sales tax at 10% when issue an invoice to your
customer.
In a case where invoice has been issued, you may issue :
i. Credit note to cancel that invoice and subsequently issue a new invoice
with sales tax at 10% or
ii. A debit note bearing the amount of sales tax at 10%.
Transitional issues from GST to SST
Preparation and critical issues address
Question
Hotel accommodation in Langkawi was booked and paid on
8/8/2018 at GST 0%. The hotel stay will be from 3/9/2018 to 9/9/2018.
What is the tax treatment ?
Answer
Based on …….
Transitional issues from GST to SST
GST audit and refund • After 1/9/2018, RMCD will carry out GST audit for closure
purpose on GST registered companies.
• GST registrants are allowed to claim input tax within 120 days
after the effective date of SST.
GST refunds : Please give me some time, says Guan Eng
“we understand that some companies have been waiting for up to
two years. Usually, the refund under the GST is an average of one
to two months. But bear with us. Give me the flexibility to clear up
the mess.”
Source : TheSundaily on 4/8/18
Questions & Answer
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