The Tourism Tax Act 2017 ('the Principal Act') was enacted by the Malaysian Government to provide a framework for the imposition and collection of a tourism tax on any tourist who stays at accommodation premises within Malaysia.

The Principal Act was subsequently amended by the Tourism Tax (Amendment) Act 2021 ('the Amendment Act') which came into operation on 1 April 2021, except for a new Part VA to be added to the Principal Act as from 1 July 2021. Part VA , amongst others, imposes a duty on any person who operates an online booking service for accommodation premises within or outside Malaysia ('digital platform service provider') to collect and pay tourism tax to the Malaysian Government in respect of accommodation premises in Malaysia booked by a tourist.

The rate of tourism tax, as prescribed under the Tourism Tax (Rate of Digital Platform Service Provider Tax) Order 2021, is RM10 per room per night. Such tax will be charged from 1 July 2021 under the Appointment of Effective Date for Charging and Levying of Tourism Tax.

Who is a tourist?

The Principal Act prescribes that the expression "tourist" is given the meaning set out in section 2(1) of the Tourism Industry Act 1992, which refers to any person, whether a Malaysian national or otherwise, visiting any place in Malaysia for any of the following purposes: (a) pleasure, recreation or holiday; (b) culture; (c) religion; (d) visiting friends or relatives; (e) sports; (f) business; (g) meetings, conferences, seminars or conventions; (h) studies or research; or (i) any other purpose which is not related to an occupation that is remunerated from the place visited.

Having regard to the above, a "tourist" would, for the purposes of the Principal Act and the Amendment Act. include a person who visits any place in Malaysia even for business purposes or for studies or research.

However, it must be noted that the Minister of Finance issued the Tourism Tax (Digital Platform Service Provider) (Exemption) Order 2021 which exempts a tourist who is a Malaysian citizen or is a permanent resident of Malaysia from paying tourism tax charged by a digital platform service provider.

The Amendment Act

Some key changes made to the Principal Act pursuant to the Amendment Act are as follows:

  1. A tourism tax will now be charged and levied on a tourist staying at any accommodation premises in Malaysia which is made available through the services provided by a digital platform service provider;
  2. Various duties are imposed on a digital platform service provider, including the following:
  1. to collect the tourism tax from a tourist who books accommodation through its online booking platform;
  2. to furnish returns in relation to tourism tax collected and to pay such tax to the Director General of Customs and Excise of Malaysia ('Director General') on a quarterly basis (or such other period as may be extended by the Director General upon application in any particular case); and
  3. to register with the Director General – in this regard, the new section 20C(3) of the Principal Act requires a digital platform service provider which has provided online booking services for accommodation premises in Malaysia before 1 April 2021 to register with the Director General no later than three months prior to 1 July 2021. 
  1. To avoid tourism tax from being imposed twice on a tourist, the Principal Act is amended to provide that the operator of the accommodation premises is exempted from collecting tourism tax from a tourist who has paid the tourism tax to a digital platform service provider.  
  2. As the duty to collect and account for tourism tax is imposed on a digital platform service provider operating within or outside Malaysia, new provisions are introduced to give extra-territorial effect to the Principal Act and its subsidiary legislation. In other words, they apply beyond the geographical limits and territorial waters of Malaysia and to any person of whatever nationality or citizenship.
To address transitional issues, section 21 of the Amendment Act provides that tourism tax shall not be charged on a tourist who stays at an accommodation premises on or after 1 July 2021 if the online booking was made with a digital platform service provider before the aforesaid date.

The Tourism Tax (Digital Platform Service Provider) Regulations 2021

To give effect to the provisions that impose a duty on digital platform service providers to collect and account for tourism tax, the Tourism Tax (Digital Platform Service Provider) Regulations 2021 ('the Regulations') were gazetted on 31 March 2021 and came into operation the following day.

Amongst others, the Regulations provide for the following:


  1. the procedure for registration of a digital platform service provider;
  2. the procedures for issuance of credit notes and debit notes by a digital platform service provider, the time frame for doing so and the particulars to be included in a credit note or a debit note;
  3. the method of payment of tourism tax or penalty payable under the Principal Act;
  4. the procedure for claiming a refund; and
  5. the forms or returns to be used in respect of the matters set out in paragraphs (1), (3) and (4) above.
In addition, the Regulations require a digital platform service provider to inform the senior officer of customs in writing when there is any change:
  1. in the name of the business;
  2. in the address of any place of business;
  3. in the status of the business; or
  4. of the authorised person or his details.
In furtherance of the provisions of section 62 of the Principal Act, the Regulations set out the rules governing the use of an electronic service to be provided by the Director General for filing or furnishing any application, return or other document and the service of any notice, direction, receipt or any other document.

A digital platform service provider operating outside Malaysia should take note that the Regulations stipulate that the Malaysian standard time (UTC/GMT +8 hours) is the applicable reference time for the purposes of receiving returns and paying tourism tax or penalty. Thus, filing deadlines have to be determined by reference to Malaysian standard time and not the local time at the place where a foreign-based service provider carries on its business.


The amendments introduced under the Amendment Act recognise the significant role played by digital platforms in the booking of accommodation premises by tourists. As payment for the accommodation premises will in most cases be made at the point of time a tourist makes an online booking on a digital platform, the Malaysian Government has taken steps to impose an obligation for collection of tourism tax on the digital platform service provider in place of the operator of the accommodation premises.

In light of the obligation imposed on foreign digital platform service providers to collect and account to the Malaysian Government for tourism tax payable by tourists who book accommodation premises in Malaysia through their platforms, operators of these platforms, such as Airbnb, and, will have to register with the Director-General and refine their online booking systems in order to comply with the requirements introduced by the Amendment Act and the Regulations before 1 July 2021.

Originally published 16 April 2021

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