Outlined below are findings since the implementation of GST in Malaysia on 1 April 2015, serving as a reminder to all GST registered companies.

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 billion.

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.