Outlined below are findings since the implementation of
GST in Malaysia on 1 April 2015, serving as a reminder to all GST
The Malaysian Goods and Services Tax (GST) was originally due to
be implemented in 2011, however, it did not come into effect until
1 April 2015. Now a year in, the Royal Malaysian Customs Department
(RMCD) has released related information.
The total collection from 1 April to 31 December 2015 was RM27.012 billion, with the estimated
collection for the 2016 financial year increasing to RM39
The GST rate will remain unchanged at 6%, with no plans to alter
it. Meanwhile, developments have been announced to help strengthen
the GST legislation, promote accuracy in submission and encourage
timely payments, including:
Penalties associated with late
payment of GST
Definition of when a taxable person
is considered to be holding a tax invoice.
From 1 January 2016 onwards, there will be penalties for
organisations with late payment of GST. According to the RMCD, the
penalty rate increases with 30 day increments,
resulting in the following:
A 5% penalty rate for GST that is
between 1 and 30 days overdue
A 15% penalty rate for GST that is
between 31 and 60 days overdue
A 25% penalty rate for GST that is
over 60 days overdue.
When does 6 Years Rule start?
It is important to understand GST requirements, especially when
claiming input tax.
For example, when a taxable individual is considered to hold a
tax invoice. This is the earlier of either: the date that the tax
invoice was posted into the company's accounts payable, or a
year from the date the individual holds the tax invoice.
If a taxable individual has not claimed back their input tax in
the taxable period, the Director General may allow the
individual to make a claim within six years from the date of supply to the
person in question.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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