Teased at last year’s budget tabling, the Malaysian government will officially start taxing digital services starting January 1, 2020.
The tax, which was passed last year at a rate of 6% per annum, covers: Paid digital services like Netflix and Spotify, digital advertising offered by Google and Facebook, and software and games distribution companies such as Steam.
The country’s Finance Minister Lim Guan Eng gave the reminder at today’s annual presentation for year 2020, which is currently ongoing in Parliament’s Lower House.
Under this new law, digital tax defaulters can be fined up to RM50,000, imprisoned for a term of up to three years, or both, upon conviction.
Since October 1, foreign digital entities have been urged to register with the government and comply with the new tax structure, and they’re fairly sure that responses will be prompt.
“Many are asking whether the foreign digital service provider companies will voluntarily register with us and pay the tax as required. Big names, without having to say who they are, will be facing bad publicity if they are not registered,” said Deputy Finance Minister Datuk Ir Amiruddin Hamzah as quoted by New Straits Times.
You heard it, big boys. Start lining up.