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On 30th June 2020, Royal Malaysian Customs Department (RMCD) has released the latest National Economic Recovery Plan (PENJANA) Frequently Asked Questions (FAQs) related to:

 

INITIATIVE 23

Aim to Lessen the Financial Burden of Businesses and Strengthening Business Through Tax Penalties Remission on Late Payment. The Government Agreed For 50% Penalty Remission to Company or Registered Manufacturer (RM) Who Make Sales Tax or Service Tax Payment From 1st July 2020 to 30th September 2020.

1. What is the taxable period eligible for a penalty remission of as much as 50%?

 

  • The taxable period involved is the taxable period ending May 2020, June 2020, July 2020 and August 2020 and payments are made within the period 90 days from the due date.
  • For example, for the taxable period ending May 2020, taxes are due paid before the end of June 2020. If full tax is paid within the period 90 days from the deadline (until 28th September 2020), a 50% penalty remission is eligible. However, if the tax is paid after 28th September 2020, no penalty remission will be granted.

**Please refer Appendix 1: Schedule of Penalties After Remission

2. What are the eligibility requirements for a registered company/ manufacturer? get a 50% penalty deduction?

  • The Company must declare SST-02 or SST-02A return declaration and make payment of sales tax or service tax or imported taxable service tax.
  • Full tax payment is made within 90 days after the due date payment.

3. What is the method/ mechanism for applying 50% penalty remission?

  • Applications for remission of penalties under this initiative ARE NOT REQUIRED submit to RMCD.

4. RMCD previously has approved a penalty remission of 100% to delays in tax payments provided that taxes are paid on or before 30th June 2020. Are these PENJANA incentives applicable to any unpaid tax after 30th June 2020 and how is the penalty remission calculated?

In the past, the RMCD has decided the payment penalty during the MCO period is fully remitted if payment is made by 30th June 2020. This decision is exclusively for the taxable period ended as follows:

Taxable period ended Deadline for filing Tax Return and Payment Payment received by 30th June 2020
29th February 2020 31st March 2020 Penalty remitted completely
31st March 2020 30th April 2020 Penalty remitted completely
30th April 2020 31st May 2020 Penalty remitted completely

The RMCD has decided any unpaid taxes after 30th June 2020 is eligible for a 50% penalty waiver provided it is no later than 90 days from the due date of tax payment. As an example, for the taxable period ending April 2020, taxes are due before the end of May 2020. If full tax is paid within 90 days from the deadline (until 29th August 2020), a 50% penalty remission is eligible for given. However, if the tax is paid after 29th August 2020, there will be no remission penalty awarded.

**Please refer to full penalty remission calculation and 50% penalty remission in Appendix 2: Calculation of Penalty Remission Rate Before/ After 30th June 2020.

5. Is the remission of this penalty involving digital service tax paid by foreign-registered persons?

  • No. Payment via DST-02 statement does not eligible for penalty remission.

6. Does the remission of this penalty involve a tourism tax paid late by the accommodation operator?

  • No.

 

APPENDIX 1

Penalty Rate After Remission Under the National Economic Recovery Plan (PENJANA)

Taxable Period Due Date Sales and Service Tax Payment 50% Penalty Remission
Apr to May 30 Jun 2020 1 Jul to 30 Jul 31 Jul to 29 Aug 30 Aug to 28 Sep 29 Sep to 28 Oct
Original penalty rate 10% 25%

(10% + 15%)

40%

(10% + 15% + 15%)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 5% 12.5% 20%
May to Jun 31Jul 2020 1 Aug to 30 Aug 31 Aug to 29 Sep 30 Sep to 29 Oct 30 Oct to 28 Nov
Original penalty rate

 

10% 25%

(10% + 15%)

40%

(10% + 15% + 15%)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 5% 12.5% 20%
Jun to Jul 31 Aug 2020 1 Sep to 30 Sep 1 Oct to 30 Oct 31 Oct to 29 Nov 30 Nov to 29 Dec
Original penalty rate 10% 25%

(10% + 15%)

40%

(10% + 15% + 15%)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 5% 12.5% 20%
Jul to Aug 30 Sep 2020 1 Oct to 30 Oct 31 Oct to 29 Nov 30 Nov to 29 Dec 30 Dec to 28 Jan
Original penalty rate 10% 25%

(10% + 15%)

40%

(10% + 15% + 15%)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 5% 12.5% 20%

Note: penalties will be reduced by 50% subject to the first 90 days after due date

 

APPENDIX 2

Penalty Rate Before/ After 30th June 2020

Taxable Period Payment Due Date Penalty Rate Before/ After 30 June 2020
Jan to Feb 31 Mar 2020   1 Apr to 30 Apr 1 May to 30 May 31 May to 30 Jun 1 Jul to 29 Jul 30 Jul to 28 Aug
Original penalty rate 10% 25%

(10% +15%)

40%

(10% + 15% + 15%)

40%

(no penalty remission due to exceeding 90 days)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 0% 0% 0%
Feb to Mar 30 Apr 2020   1 May to 30 May 31 May to 30 Jun 1 Jul to 29 Jul 30 Jul to 28 Aug 29 Aug to 27 Sep
Original penalty rate 10% 25%

(10%+15%)

40%

(10%+15%+15%)

40%

(no penalty remission due to exceeding 90 days)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 0% 0% 20%
Mar to Apr 31 May 2020   1 Jun to 30 Jun 1 Jul to 30 Jul 31 Jul to 29 Aug 30 Aug to 28 Sep 29 Sep to 28 Oct
Original penalty rate 10% 25% (10%+15%) 40% (10%+15%+15%) 40%

(no penalty remission due to exceeding 90 days)

40%

(no penalty remission due to exceeding 90 days)

Penalty rate after remission 0% 12.5% 20%

NOTES:

  1. Tax payments for taxable periods from January to February, February to March and March to April made before and on 30th June 2020, penalties will be fully remitted.
  2. Balance of payments for taxable periods from February to March and March to April made after 30th June 2020, penalties will be reduced by 50% subject to the first 90 days after the payment deadline.

Go to >>

> Exemption Sales Tax on car purchasing,

> Exemption Tourism & Service Tax on accommodation operator.

 

INITIATIVE 32

Tax Incentives for Acquiring Car, Aiming to Revive Automotive Industry and To Reduce Financial Burden. The Government Had Assent to Exempt 100% Off Sales Taxes on Sale of Complete-knocked-down (CKD) Passenger Car & 50% For Imported Car.

A. EXEMPTION FROM PAYMENT OF SALE TAX

1. When is the date or period for which this exemption is effective?

  • The effective date for this exemption is from 15th June 2020 to 31st December 2020, subject to other conditions set by Ministry of Finance and Royal Malaysian Customs Department.
2. What is a passenger car?
  • All types of passenger cars including MPVs and SUVs (not included van for commercial purposes and MPV with 11 seats and above).

3. Do the “windows van” and “pick-up” eligible to enjoy this exemption?

  • Not eligible.

4. Do commercial vehicles such as panel vans, trucks, prime movers and buses are eligible for this exemption?

  • Not eligible.

5. Who is eligible to claim this incentive?

Only the following category companies are eligible for this incentive:

  1. Franchise Holder/ Distributor or Dealer buying from the local car assembly company (Registered Manufacturer);
  2. AP Franchise Holders importing new CBU cars
  3. Open AP holders registered as members of the PEKEMA whom import used CBU cars; and
  4. The other party approved by the Ministry of Finance

6. Are individual AP holders such as students eligible for this ales tax exemption?

  • Not eligible. Only 4 categories of companies as in question 5 are eligible for this sales tax exemption.

7. What is the date of this exemption in related to?

  • For local complete-knocked-down (CKD) passenger cars, the effective date for sales tax exemption refers to the date of sales invoice issued by manufacturer to buyer either Franchise holder/ distributor or dealer.
  • For CBU imported car, the effective exemption date is referred to the date of Customs Form No.1 (K1).
  • As such, only sales invoices and Customs Form No.1 dated 15th June 2020 to 31st December 2020 are eligible for this exemption.

8. If CBU car is registered in Sistem Maklumat Kastam (SMK) before 15th June 2020 but sales tax is paid after 15th June 2020, is the car eligible for this exemption?

  • Yes.

9. How to enjoy these exemptions and do any declaration or exemption reference letter is necessary to be stated?

The Ministry of Finance’s letter of reference must be stated in order to obtain sales tax exemption:

i. For local CKD assembly cars, the sales invoice issued by the manufacturer to the buyer (Franchise holder/ distributor/ dealer) need to state:

  • “Pengecualian cukai jualan 100% di bawah Seksyen 35(3) Akta Cukai Jualan 2018 mengikut surat MOF.TAX.700-2/ 3/ 36 Jld.3(12)”
  • “100% sales tax exemption under Section 35 (3) of the Sales Tax Act 2018 in accordance with letter MOF.TAX.700-2/ 3/36 Jld.3 (12)”

 

ii. For new imported CBU cars, Custom Form No.1 is required to state:

  • “Saya menuntut pengecualian cukai jualan 50% di bawah Seksyen 35(3) Akta Cukai Jualan 2018 mengikut surat MOF.TAX.700-2/3/36Jld.3(12)”
  • “I had claim 50% sales tax exemption under Section 35 (3) Sales Tax Act 2018 pursuant to letter MOF.TAX.700-2 / 3/ 36 Jld.3 (12)”

 

iii. For used CBU imported cars, Customs Form No.1 is required states:

  • “I had claim 50% sales tax exemption under this Section 35 (3) Sales Tax Act 2018 pursuant to letter MOF.TAX.700-2 / 3/ 36 Jld.3 (11)”.

10. How is the sales tax exemption value determined?

  • Sales tax exemption value is calculated based on the percentage exemption (100% or 50%) on the actual value of sales tax imposed and levied on the sales value in accordance with Rule 4 to the Regulations 8 under Sales Tax (Determination of Sales of Goods).

11. What is the last date of the sales tax exemption registration?

  • All vehicle that has sales tax exemption must be registered in the period from 15th June 2020 to 31st January 2021.

12. What action should the company take if the car has sales tax exemption but failed to be registered until 31st January 2021?

  • The company is required to repay the sales tax amount by Form SST-ADM to the nearby customs office.

13. Who needs to pay back the sales tax?

  • Companies whom buying from car manufacturers (for installation of local CKD cars) and companies that pay sales tax through the Customs Form No 1.

14. Is there restriction on the sale of passenger cars to any buyer for cars that have this sales tax exemption? (example: Government agency, GLC Company, not a citizen).

  • No sales restrictions.

15. What information should be furnished to the MOF in order to qualify for sales tax exemption?

  • Companies are required to submit certain information in the set format and time. Please refer to the terms of the approval stated in the letter MOF.TAX.700-2 / 3/36 Jld.3 (11) and MOF.TAX.700- 2/3/36 Jld.3 (12).

B. PAYMENT OF SALES TAX REFUND

1. Is a company that has paid sales tax before the exemption period (15th June 2020 to 31st December 2020) are eligible for a tax refund?

Sales tax on passenger cars paid between 1st January 2020 to 14th June 2020 eligible to claim sales tax return with following conditions:

  1. The car is registered from 15th June 2020 to 31st January 2020
  2. Claim for refund are made no later than 31st March 2021.

2. What documents are needed to prove sales tax has been paid from 1st January 2020 to 14th June 2020?

The following documents need to be verified:

  • Sales invoices for locally manufactured CKD cars issued by manufacturers dated 1st January 2020 to 14th June 2020 and there is sales tax being charged.
  • Customs Form No.1 for imported CBU cars proving sales tax has been paid and dated 1st January 2020 to 14th June 2020.

3. For CKD local assembly cars, what does it mean with sales tax has been paid within 1st January 2020 to 14th June 2020? Is it based on SST-02 return?

  • For local assembly CKD cars, the sales tax purpose has been paid is based on the invoice issued by the manufacturer to the buyer (franchise holder/ distributor/ dealer) instead of the SST-02 statement.

4. Will the amount of the refund claim be fully paid?

  • The amount of overpaid sales tax that is eligible to be claimed back subject to letter of confirmation of OTR price difference from MOF and further review by RMCD.

5. For locally manufactured CKD passenger cars from the factory in 2019 and sales tax was paid during the year 2019 and unsold, is it eligible to claim this refund?

  • No. Only local CKD passenger cars that sales tax has been paid from 1st January 2020 to 14th June 2020 are eligible to claim sales tax refunds.

 

6. For imported CBU passenger cars already in Malaysia before 2020, will the sales tax refund application be considered if sales tax is paid before 2020 when the unit is not yet sold?

  • No. Only imported CBU passenger cars whose sales tax has been only paid from 1st January 2020 to 14th June 2020 are eligible to apply for sales tax refund.

7. Who is eligible to apply sales tax refund?

  • For local assembly passenger cars, buyers from car manufacturers are eligible to claim sales tax refund. A buyer is a person who pays sales tax and is usually a Franchise holder, Distributor or Dealer.
  • For imported CBU passenger cars, taxpayers as per stated in Customs Form No.1 are entitled to claim sales tax refund.

 

8. When is the due date for the applicable passenger car, must be registered?

  • Passenger car that entitled to claim sales tax refund must be registered from 15th June 2020 to 31st January2021. Refund will be cancelled if the car does not register within the stipulated period.

9. When is the deadline for apply for sales tax refund?

  • Sales tax refund application must be submitted to Tax Division, Ministry of Finance before 31st March, 2021.

10. Do companies need to apply sales tax refund on a monthly basis or is it accumulated and sent by 31st March 2021?

  • The company is advised to furnish sales tax refund claim on monthly basis.

11. As a registered manufacturer, Delivery Order for delivery of the car to the franchise holder is issued on 1st June 2020, to 14th June 2020, but the invoice is issued on 30th June 2020. Is the car eligible for sales tax refund or auto-tax exemption?

  • The car is eligible for automatic sales tax exemption because invoices are issued within the exemption period from 15th June 2020 to 31st December 2020.

C. APPLICATION OF SALES TAX REFUND TO RMCD

1. Who will make the sales tax refund to qualified company?

  • Sales tax refund application must be first submitted to MOF using Appendix B/ Appendix C. A confirmation letter will be issued by MOF to enable the company to claim the sales tax refund to RMCD.

2. What form should you use to claim your sales tax refund to RMCD and what are the supporting documents need to be included?

The sales tax refund application to RMCD must apply using JKDM-2 form and supporting documents as follows:

  1. Letter of confirmation from MOF
  2. Purchase invoice by Franchise holder / distributor / dealer of manufacturer (for CKD cars)
  3. Customs Form 1 (for CBU import)
  4. Copy of car grant (for confirmation that the car has been sold)
  5. Copy of invoice from distributor / dealer to customer (to confirm the sale price does not include sales tax)

3. When is the sales tax refund required to be submitted to RMCD and at which branch?

  • Sales tax refund must be filed within three months from the date of the confirmation letter issued by MOF and submitted to the Revenue Accounting Branch, Customs office close to the claimant company.

D. GENERAL

1. As a registered manufacturer, where should the exempted sales (supplies) obtaining the Minister’s exemption, be declared in the SST-02?

  • RMCD is in the process of creating a column for sales exempted from sales tax under Section 35 (3) of the Sales Tax Act in the SST-02 return. Currently, the company is advised to include the exempted sales in column 18 (b) (1) of the Schedule A, SST-02 return.

2. Is the report format sent to the MOF also required to be sent to the Royal Malaysian Customs Department?

  • Not required.

3. Is the exemption under item 3.4 and 5 of Schedule A, Sales Tax (Person Exempted from Payment of Tax) Order 2018 is an exemption given to Governments and State Governments is still applicable when this special exemption is approved?

  • Exceptions under details 3.4 and 5 of Schedule A, Sales Tax Order still applicable to any eligible person.

Go to >>

> 50% penalty remission on Sales and Service Tax (SST) late payment,

> Exemption Tourism & Service Tax on accommodation operator.

 

INITIATIVE 35

Business Aid to Tourism Industries Aiming to Cater Covid-19 Impact Through Tax Incentive. The Government Has Agreed to Gives Tourism Tax Exemption Effective from 1st July 2020 to 30th June 2021 And Service Tax Exemption on Hotel Further Extended Until 30th June 2021.

1. When is the tourism tax exemption period effective?

  • The tourism tax exemption period is effective from 1st July 2020 to 30th June 2021.

2. Do accommodation operators need to apply for approval to get exemption on the tourism tax for the specified period?

  • The accommodation operator does not need to apply for approval exemption from the imposition of tourism tax.

3. Is tourism tax applicable to accommodation rendered by Foreign tourists check in on 30th June 2020, at 2pm and check out on 1st July 2020, at 11am?

  • Tourism taxes are only exempted for foreign tourists enrolled in 1st July 2020.

4. Is tourism tax applicable to accommodation where Foreign tourists check in on 30th June 2021, at 2pm and check out on 3rd July 2021, at 11am?

  • Foreign tourists are not subject to tourism tax on accommodation overnight on 30th June 2021. However, the overnight stay on 1st to 2nd July 2021 are subject to tourism tax.

5. Is the TTx-03 return required to be submitted by the registered accommodation operator during the exemption period?

  • Yes, the accommodation operator must submit TTx-03 return based on the taxable period even when no tourism tax is imposed to foreign tourists. The accommodation operator must also account for and paying the tourism tax received from foreign tourists for accommodation prior to the exemption period or any tourism tax that has not been received from tourists in twelve calendar months that are in the taxable period.

6. Is the amount of tourism tax exempted needed to be specified in the TTx-03 statement?

Column 7 of TTx-03 must be filled out with the tax amount for each night where no tourism tax charge (exempted) to foreign tourists.

7. Does the accommodation operator need to state tourism tax exemption on the invoices?

Invoices issued to foreign tourists in connection with the tourism tax can be stated as “Exempted” or “NIL” or “RM0.00” for the exemption period.

8. What is the liability of the new accommodation operator operating during the exemption period from 1st July 2020 to 30th June 2021?

  • Any new accommodation operator operating during the period are required to apply for registration within 30 days from the commencement date and the effective date of registration is on the first day of the following month after the application date submitted.

Go to >>

> 50% penalty remission on Sales and Service Tax (SST) late payment,

> Exemption Sales Tax on car purchasing,

 

Source from RMCD Official Website Announcement (https://mysst.customs.gov.my/assets/document/Annoucement/SOALAN%20LAZIM%20PENJANA.pdf)

For more information, please visit SOALAN LAZIM PENJANA

 

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