Google Malaysia Announces 6 Percent Digital Tax To Take Effect Starting January 2020

The Service Tax (Amendment) 2019 Bill which imposes a 6% tax on digital services that was passed in April this year will be implemented beginning January of next year. In compliance with Malaysia’s new Sales & Services Tax, Google has announced that a 6% tax will be charged their clients in Malaysia once the law comes into effect.

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Speaking to The Star, a Google spokesperson confirmed that the tax will be applicable to the company’s G Suite services which provides custom email addresses, cloud storage, and productivity related applications to businesses and companies. The tax will be charged on user purchases and will be reflected under the “Billing & Payments” section of their accounts.

The spokesperson has not disclosed whether the tax will be affecting online purchases via Google Play Store, or other Google-owned platforms such as YouTube Premium and YouTube Music. Instead, Malaysian users are asked to wait for further announcements, and any possible changes in pricing will be alerted to them via email.

The 6% tax is applicable to digital services such as software, applications, video games, digital music and film, online streaming services, and subscription-based media, among many others within the category. Other online and digital services such as Netflix, Spotify, and Steam will be affected by the digital tax as well. However, we have yet to receive any official announcements from these platforms regarding this.

Foreign companies providing these digital services have been allowed to register with the Customs Department from 1 October 2019. Registration for foreign service providers is mandatory when the total value of digital services provided to Malaysian consumers exceeds RM500,000 per year.

(Source: The Star.)

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