Service tax to be levied on digital services: Budget 2019


  • TECH
  • Friday, 02 Nov 2018

Finance Minister Lim Guan Eng tabling the 2019 budget at Dewan Rakyat in parliament on Friday. Azman Ghani / The Star

KUALA LUMPUR: The Malaysian Finance Ministry (MOF) has announced the implementation of service tax on foreign digital services – including software, music, video and digital advertising – effective Jan 1, 2020. 

In Finance Minister Lim Guan Eng's presentation, several company logos were shown including music streaming service Spotify, video streaming site Netflix and game distribution platform Steam. 

In a statement, MOF says that "for online services imported by users, foreign service providers will be required to register with customs, apply and remit the relevant service taxes that will take effect starting Jan 1, 2020". 

This taxation measure is intended to level the playing field between physical and online stores, especially online stores owned by foreign companies. 

Stay tuned for updates.

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