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Introduction To Taxation
Stamp Duty
Sales & Service Tax
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
LEARNING OUTCOME
Understand the property chargeable to
stamp duty and applicable exemptions
Apply the knowledge in calculating the
duty payable
Understand the meaning of Sales Tax and
applying the knowledge in the calculation
of tax payable Understand the meaning of Sales Tax and
applying the knowledge in the calculation
of tax payable Slide 2 of26
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
Topic & Structure of the lesson
Introduction to Stamp duty
Types of stamp duty
Stamp duty rates
Stamp Duty exemption
Penalty for late payment Introduction to sales tax
Taxable period for sales tax
Rates for sales tax
Penalty for late payment charges
Licensing
Exemption for sales tax
Drawbacks for sales tax
Introduction to service tax
taxable period
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
Key Terms you must be able to use
Stamp duty
Ad valorem duties
Fixed duties Sales tax
Taxable period
Licensing Taxable goods
Taxable services
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
INTRODUCTION
Stamp duty is chargeable on certain
instruments and documents
The rate of duty varies according to the
nature of the instrument and transactedvalue.
Exemption of stamp duty is given on
certain instruments and documents Stamp duty is charged under the Stamp
Act 1949, Stamp Duty(Exemption) Order
and Stamp Duty (Remission) Order Slide 5 of26
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
TYPES OF STAMP DUTY
There are two type:
Fixed duties fixed sum which does not
vary with the value of transaction specifiedin the instrument.
Ad valorem duty stamp duty that varies
with the value of the transaction asspecified in the instrument.
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
STAMP DUTY RATES
The value to be used is the market value of the
property or the money consideration, which ever is
greater.
Stock, shares or marketable securities the rate is
RM3 per RM 1,000 or part thereof
Conveyance, Assignment or transfer
Value RM000 Rate Duty PayableRM
On the 1st 100 RM 1 per RM100 or part thereof 1,000
On the next 400 RM2 per RM100 or part thereof 8,000
In excess of 500 RM3 per RM100 or part thereof
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
SECTION 12A
Under Section 12 A The date for determining market value
of the assessment of the value of property under transfer or
settlement are as follows :
Settlement or gift Date of execution of the instrument of trust, settlement or gift
Sale under a duly stamped sale and purchase
agreement
Date of execution of the agreement
Transfer of property granted by a statutory
body, local authority or any co-operative
society
Date when the final terms of transfer has
been communicated to the transferee
Subsequent resale of the above Date of consent by the statutory body, local
authority, board of the co-operative society
Duly stamped sale and purchase agreement
where financial arrangement have been made
Date of execution of the agreement
Any other case Date of execution of the instrument of transfer
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
STAMP DUTY EXEMPTION
Purchase of low cost house, provided
execution of sale and purchase agreement
was done on or after 1 July 2002 All instrument relating to the issue and
transfer of company bonds.
Effective8
September200
7, all instrumentaffecting the transfer of any landed
property from husband to wife vice versa
is exempted.
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
STAMP DUTY EXEMPTION
All instrument relating to purchase of
debentures or Islamic securities approved
by the Securities Commission All instrument pursuant to merge or
acquisition of public listed companies
approved by the Securities Commission
from 1/1/2008 31/12/2010
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
PENALTY FOR LATE STAMPING
Any instrument not stamped within the
permitted period may be stamped on
payment of :
RM25 or5% of the deficient duty whichever is
greater if stamped within 3 months after
deadline
R
M50or 1
0%of the deficient duty whichever isgreater if stamped after3 months but before 6
months after deadline
RM100 or20% of deficient duty whichever is
greater in any other case Slide 11 of 26
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
INTRODUCTION TO SALES TAX
Sales tax is a single tax levied on certain
imported and locally manufactured goods,
at time of importation or at the time the
goods are sold or disposed by the
manufacturer
Taxable goods means goods
manufactured or imported are taxableunless they are specifically exempted
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
BASIS OF TAXATION
Sales tax is a consumption tax and under
the system, the onus is on manufacturers
of taxable goods to levy, charge andcollect the tax from their customers
For imported goods, sales tax is collected
from the importer upon the release of
taxable goods from Customs control
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
RATES OF TAX
Sales tax is an ad valorum tax and can be computed
based on the value of taxable goods sold, used or
disposed of or imported
Sales tax is chargeable at the following rate:
Class of goods Rate (%)
Fruits, certain foodstuff, timber and building material 5
Liquor and alcoholic drinks 5
Cigarettes and tobacco products 5
All other goods not specifically exempted 1 0
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
SALES TAX PAYABLE
Sales tax charged to the licensed manufacturer mustbe paid to the Customs Department in the prescribed
form within 28 days after the month end of each
taxable period
There are 6 taxable periods in each calender yearwhich are follows:-
Taxable Period Due Dates for tax to be paid
January to February 28March
March to April 28May
May to June 28 July
July to August 28 September
September to October 28 November
November to December 28 January
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
PENALTY
If a licensed manufacturer fails to pay the
sales tax due within the stipulated period
of28 days, a penalty of 10% shall be
imposed on the amount due
If the amount due remains unpaid the
penalty is increased by 2% for every
succeeding period of30 days or partthereof
The maximum penalty lived is 50%
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
LICENSING
Any person engaged in the manufacture of
taxable goods is required to apply for a
license.
A manufacturer of taxable goods whose
total sales value did not exceed RM
100,000 in the preceding year and is not
expected to exceed RM 100,000 duringthe next 12 months may apply for a
certificate of exemption from licensing
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
GOODS EXEMPTED
All exports are exempted from sales tax
Proof of export is necessary by way of customs
export declaration and the licensed
manufacturers export invoice Any person other than a licensed manufacturer
may be exempted from payment of sales tax
when he exports goods purchased from
licensed manufacturer within 6 months from
date of purchase.
Prior approval from the Director General of
Custom is required. Slide 18 of26
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
REFUNDS,DRAWBACKS AND
REMISSION A licensed manufacturer or importer can apply for
refund of sales tax that have been paid by reason
of error provided the claim is made within 1 year
after the payment is made
A licensed manufacturer or importer can claim
drawback of full amount of the sales tax paid in
respect of goods which were subsequently
exported Application to claim drawback must be within 3
months from the date the goods are exported and
the goods must be exported within 12 months from
the date sales tax has been paid Slide 19 of 26
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
REFUNDS,DRAWBACKS AND
REMISSION
Notice claiming sales tax drawback shall
be endorsed on Export Declaration form
The Minister of Finance has the power toremit the whole or any part of sales tax
due and payable or penalty payable.
A licensed manufacturer who is not able topay the sales tax payable may apply for
remission to the Minister of Finance.
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
SERVICE TAX -
INTRODUCTION
Service tax is a consumption tax levied
and charged on any taxable service
provided by any taxable person The Service Tax Act 1975 applies
throughout Malaysia excluding Langkawi,
Labuan, Tioman and the Joint
Development Authority (JDA)
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
SERVICE TAX
INTRODUCTION
Service Tax is levied in respect of the
following :
Prescribed Services or Taxable Servicesprovided by or in any prescribed
establishment(provided in handouts) or
prescribed professional
establishment(provided in handouts)Prescribed Goods or Taxable Goods sold or
provided either by or in any prescribed
establishment(provided in handouts)Slide 22 of26
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
RETURNS AND PAYMENT
Service tax charged must be paid to the Customs
Department in the prescribed form within 28 days after
the month end of each taxable period
There are 6 taxable periods in each calender year whichare follows:-
Taxable Period Due Dates for tax to be paid
January to February 28 March
March to April 28May
May to June 28 July
July to August 28 September
September to October 28 November
November to December 28 January
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
PENALTY
If a licensed manufacturer fails to pay the
sales tax due within the stipulated period
of28
days, a penalty of 10%
shall beimposed on the amount due
If the amount due remains unpaid the
penalty is increased by 10% for every
succeeding period of30 days or part
thereof
The maximum penalty lived is 50%
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
Question & Answer Session
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BM058-3.5-2-ITAX Introduction To Taxation Stamp Duty, Sales Tax & Service Tax
NEXT SESSION
IN
DIVIDUAL TAXATION
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