This post is also available in: Bahasa Melayu
Service tax at 8% from March 2024
In the 2024 budget, it was announced that service tax rate would be increased from the current 6% to 8% effective 1st March 2024.
The increase of 2% does not apply to:
- Food and beverages services
- Telecommunications services
- Parking services
The service tax rate for the above will remain at 6%.
The scope of service tax will also be expanded to include:
- Karaoke services
- Maintenance/repair services
- Brokerage and underwriting services other than those relating to financial services
- Logistics services
The service tax rate for the above will be at 8%, except for logistics services which will be at 6%.
Determination of service tax rate
Service tax rate for taxable services provided will be according to the date the service is provided.
Where services are rendered in full before 1st March 2024, the service tax rate remains at 6%.
Services rendered from 1st March 2024 will be at 8%.
If the services rendered span across the effective date, i.e. service commences before 1st March and completes after that, service tax rates are to be apportioned.
However, if invoice is issued and payment is received before 1st March:
- If paid in full, then the service tax will be at 6%
- If part paid, then the service tax on the balance will be at 8%
This is regardless of whether service tax is accounted for on an invoice or payment basis.
Updates
As of 1st March 2024, Traditional and Complementary Medicine (TCM) services provided by the practitioners registered under the Traditional and Complementary Medicine Act are exempted from charging service tax.
These include:
- Traditional Malay Medicine,
- Traditional Chinese Medicine,
- Traditional Indian Medicine,
- Homeopathy,
- Chiropractic,
- Osteopathy, and
- Islamic Medicine Practice.
Any service tax that has already been collected prior to 1st March 2024 should be remitted to Customs.
Service tax to be imposed on maintenance and repair services starting 26th Feb 2024.
Maintenance and repair services have been included as a new item of taxable service under.
Taxable services include:
- maintenance management
- corrective maintenance
- preventive maintenance
- calibration, adjustment, recondition, reconfigure or overhaul
The following services are exluded:
- maintenance management services related to land or building for the use of residential provided by any developer, joint management body, management corporation or residential association
- repair services on the residential building
ABSS Service Tax compliant version
ABSS Accounting v30 and ABSS Premier v30 was released at the end of February 2024 to comply with the increase of Service tax from 6% to 8%.
This post is also available in: Bahasa Melayu
