Malaysia
From 1 January 2020, the Malaysian tax authority confirmed that it would amend its current Sales and Service Tax (SST) legislation in order to apply SST to online services supplied by non-resident (foreign) companies…
Malaysia
From 1 January 2020, the Malaysian tax authority confirmed that it would amend its current Sales and Service Tax (SST) legislation in order to apply SST to online services supplied by non-resident (foreign) companies.
At present, foreign businesses providing digital services in Malaysia do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage this gives to non-resident companies over Malaysian resident providers, the Malaysian government proposes that SST at 6% will be charged on these types of transactions made to both businesses and to consumers.
This new obligation will be subject to an RM 500,000 registration threshold (approx. € 100,000) and will apply to a range of electronic services including: streamed games, music, apps, films, e-books, e-journals and internet services.
Mexico
The Mexican senate is proposing to levy VAT at 16%, on digital e-commerce supplies provided to consumers by non-resident online platforms.
At present, non-resident online platforms do not have to charge VAT on their sales in Mexico. However, in an effort to remove the unfair advantage that this gives to non-resident companies over Mexican resident providers, the Mexican senate proposes that VAT at 16% will be applied on these types of transactions from as early as January 2020.
If introduced, the VAT on these transactions will be withheld by the payment providers, who will pay this direct to the tax authorities. This in principle will mean that the foreign supplier will not have a requirement to VAT register in the country.
This follows Argentina, Colombia and Uruguay who have also imposed VAT on foreign online platform providers.
The above information was kindly provided by Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected].
