Indirect tax such as sales tax, service tax and customs duties has a direct correlation with the bottom line of many businesses, thus influencing the businesses’ pricing and cashflow. It is crucial for businesses to manage their exposure and risks in respect to indirect tax and prevent unnecessary costs for maximisation of margin.

In the 2005 Budget, the Government announced that the current sales tax and service tax would be replaced with a broad-based consumption tax to be known as the goods and services tax [“GST”] with effect from 1st January 2007. This proposal is in line with the Government policy of conforming to the policies of AFTA. However, the Malaysian Government has on 22nd February 2006 announced that the implementation of GST would be postponed to a date to be announced later.

GST, also known as Value Added Tax [“VAT”] in other countries, is based on value added concept and is levied on final consumption of goods and services. Unlike the present sales tax system, the GST is a multi-stage tax. Given its enormous impact on businesses upon implementation, awareness of GST and advance planning of GST such as streamlining of businesses to cope with potential challenges are essential.

Our indirect tax services include:-

Assisting in compliance, management, planning and mitigating indirect tax exposure and risks Assisting in tariff classification, customs valuation and documentation review Assisting in indirect tax refunds or drawbacks and exemptions applications Advising on the mechanism of GST, differentiation of GST from the present sales tax and service tax system, implementing GST

For further information about our indirect tax services, please contact our partners below:-