Malaysians buying apps apps or making in-app purchases from the Google Play store will be charged 6% digital tax starting next year.
“Even if you’re not located in Malaysia, this change in tax laws will still apply for purchases made by Malaysia customers, ” it said in a notice directed at Google Play developers.
The company said it will calculate and remit the taxes to the appropriate authorities so no action is required from the developers.
As the 6% tax will also affect subscription-based apps, Google said it’s up to developers if they want to change their prices.
Singaporeans too are expected to pay tax on Google Play purchases, as the Goods and Services Tax (GST) which imposes a 7% tax, will kick in next year.
Earlier this month, Google Malaysia announced its G Suite services will also incur a 6% digital tax but it's still mum on its newly introduced YouTube Premium and Music Premium subscription services.
“We always comply with the tax laws in every country we operate in, and we continue doing so as tax laws evolve. To be in compliance with Malaysia’s new Sales & Services Tax, we will charge a 6% Services Tax to our clients in the country, starting from January 1,2020, once the law comes into effect," a Google spokesperson said in an earlier statement to The Star.
The Malaysian government first announced that a 6% digital tax will be imposed on foreign service providers effective Jan 1,2020, at last year's Budget tabling.
Registration for foreign service providers is mandatory when the total value of digital services provided to consumers in Malaysia exceeds RM500,000 per year.
According to the Customs Department, Google is among at least 126 foreign digital service providers that have registered for the tax in Malaysia as of Dec 20.