The Muamalat Newsletter Vol. 1 2024

FEM eNewsletter | June 2024 35 competitiveness (World Bank Malaysia, 2018; Sheng, 2022; MyDigital, 2022). 2019 ◊ Service Tax on Digital Services (SToDS): Malaysia introduced a 6 per cent tax on the total value of digital services provided to consumers in the country. This includes activities such as website provision, hosting, software, access todatabases, digital content, and online advertising. The threshold for SToDS is set at RM500,000 per year. 2020 ◊ Service Tax Industry Guide Update: On August 1, 2020, the Royal Malaysian Customs Department (RMCD) published a new guide, updating and replacing the one from August 2019. 2021 ◊ Service Tax Industry Guide Update: On February 1, 2021, RMCD further updated the guide to include new examples of digital services, guidance on exemptions within the same group, and when tax is due. ◊ Special Voluntary Disclosure Program for Direct Taxes: Effective January 1, 2022, Malaysia introduced this program, runningthroughSeptember 30, 2022, addressing outstanding indirect tax liabilities for non-resident digital services providers. ◊ Service Tax Exemption for Digital Services in Banking and Financial Services: On August 9, 2021, RMCD clarified that service tax exemption applies to digital service providers charging fees to bank account holders for initiating transfers or withdrawals. 2022 ◊ Tourism Tax (TTx) for Digital Platform Service Providers (DPSPs): Malaysia introduced a tax for DPSPs offering online booking of accommodation premises without a specific threshold. ◊ Voluntary Disclosure Program for Direct Taxes: On June 6, 2023, the IRBM launched a new program running until May 31, 2024, offering 100% penalty remission and audit exemptions. ◊ Service Tax Policy 1/2022: On August 1, 2022, RMCD published guidance exempting local non-bank service providers from charging service tax on digital payment services, including payment instrument issuers, merchant acquirers, and payment system operators. 2023 ◊ Sales Tax on ImportedGoods: Starting January 1, 2023, a 10% sales tax is charged on imported online goods delivered to Malaysia by registered vendors, applicable to items priced below RM500.