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Digital tax to be introduced in 1st of January 2019

In Budget 2019, it was announced that all imported services, including online ones like, software, music, videos and digital advertising, will be imposed with a service tax starting 1st of January 2019.

The MoF has said the tax would be impose on online services imported by users, foreign service providers such as Netflix and Spotify are required to register with the Customs Department, apply and remit the relevant service taxes.

The digital tax will only apply on services offered online that requires a payment to the company, not on transactions made, said tax advisory firm Axcelasia Taxand Sdn Bhd. Its Managing Director, Leow Mui Lee said, “For example, the user downloads a game that needs an in app purchase. These are the items that fall under the digital tax.” 

source : The Star Online