Dear valued Zoewebs customers,
As announced by the Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim during Malaysia’s Budget 2024, there will be an increase in the service tax rate from 6% to 8% on various taxable services, excluding F&B, telecommunication services, vehicle parking space services, and logistic services. This change will have implications for all digital services provided by Malaysian companies, including Zoewebs.
Many digital companies, such as online advertisement service providers, domain name providers, and hosting providers, have already announced tax increases for their services. Please review announcements from companies like Google Ads and MYNIC,
Royal Malaysian Customs Department Guidelines:
The Royal Malaysian Customs Department issued guidelines dated February 14, 2024, outlining transitional rules for the change in the service tax rate specifically applicable to digital services provided by foreign registered persons (RFPs). Here’s a summary of the transitional rules:
Service Tax Rate Transition:
- For digital services provided by an FRP before March 1, 2024, with service tax due before this date, the tax rate will remain at 6%.
- For digital services provided by an FRP on or after March 1, 2024, with service tax due on or after this date, the new tax rate of 8% will apply.
- If a digital service spans before and after March 1, 2024, the tax will be calculated based on the proportion attributed to each period (6% for before, 8% for after).
- Payments received before March 1, 2024, for digital services to be provided after this date, will be taxed at the old rate of 6%.
Impact on Zoewebs Services:
As a provider of digital services including hosting servers, domains, and online advertisements, Zoewebs will be affected by this change. All services provided by Zoewebs will be subject to the new service tax rate of 8% starting March 1, 2024. This includes but is not limited to:
- Web hosting services
- Domain registration and renewal
- Online advertisement services
Action Required:
We advise all our customers to take note of these changes in the service tax rate and plan accordingly. Please ensure that any pending payments or renewals are processed before March 1, 2024, to benefit from the current tax rate of 6%.
Thank you for your attention to this matter. We appreciate your continued support and understanding as we adapt to these regulatory changes.
Warm regards,
Zoewebs
