25 April, 2018
This circulation is aimed at providing you with recent tax updates and developments in Malaysia. In this edition, we highlight recent updates on Malaysia's signing of the BEPS Multilateral Convention and the ongoing studies being conducted by Malaysia with respect to the taxation of the digital economy from a direct and indirect tax perspective. We also discuss the updated Mutual Agreement Procedure Guidelines released in January 2018, as well as the launch of the Malaysia GST Compliance Assurance Programme.
In selected articles, you may click to read a more detailed summary.
We hope that you find these updates useful, and please feel free to contact us if you have any queries or require any assistance.
Direct Tax
Malaysia signs BEPS Multilateral Convention
On 24 January 2018, Malaysia signed the BEPS Multilateral Convention (MLI). Malaysia proposes to adopt some of the proposed changes relating to permanent establishments, in addition to the mandatory minimum standards on prevention of treaty abuse and the mutual agreement procedures. Read more here.
Malaysia studying proposals to introduce tax model for online businesses
According to updates made by the Finance Minister II Datuk Seri Johari Abdul Ghani to the House of Representatives on 19 March 2018, The Ministry of Finance is currently conducting a detailed analysis of the suitable mechanism and model for the imposition of taxes on online businesses. Read more here.
IRB releases updated Mutual Agreement Procedure (MAP) Guidelines
The Malaysian Inland Revenue Board (IRB) published updated MAP Guidelines on 11 January 2018, to incorporate the recommendations of the OECD BEPS Action 14 final report on "Making Dispute Resolution Mechanisms More Effective." Read more here.
Clarification on tax audits
In November 2017, the minutes of the working group meeting between the IRB with accounting and tax bodies (DESIRE Dialogue No. 1/2017) was published. The minutes contain, amongst others, comments from the IRB in response to queries regarding the operation of tax audits by the IRB. Read more here.
Goods and Services Tax (GST)
Proposal to introduce GST registration requirements for foreign companies supplying digital services
During the recent National GST Conference 2018, the Royal Malaysian Customs Department announced that proposed amendments to the GST laws are currently being considered, to impose GST on digital services supplied by foreign companies to Malaysian consumers. Read more here.
Launch of the Malaysia GST Compliance Assurance Programme (MyGCAP)
On 24 January 2018, the Prime Minister Datuk Seri Najib Tun Razak officiated the launch of MyGCAP. Under MyGCAP, certified GST-registered businesses will be entitled to special benefits, including expedited GST input tax refunds. Read more here.
For further information, please contact:
Adeline Wong, Partner, Wong & Partners
adeline.wong@wongpartners.com
