Credit Card Service Tax Malaysia

At the moment there are at least 10 2 million credit cards and charge cards being used in malaysia.

Credit card service tax malaysia. Principal card rm25 per card per year supplementary card rm25 per card per year. Rm25 00 will be imposed on each principal and supplementary credit card and charge card upon new card activation date including activation of temporary cvv and subsequently upon the anniversary of your card approval date. Kuala lumpur aug 30 a service tax of rm25 will be imposed on either new credit card users or those who renew their credit cards from september 1 onwards the finance minister has ordered. Rate of service tax for credit and charge cards 11.

With effect from 1 january 2020 service providers outside malaysia who provide digital services to malaysian consumers will be required to register in malaysia and charge service tax. Card service tax will drive down malaysia s credit cards in force in 2019 2020. In an order that was made just days before the revived sales and services tax sst regime kicked in on. The rate of service tax is 6 of the price or premium for insurance policy value of betting and gaming etc.

The issuer of the credit card shall impose a service tax in every monthly statement covering 18 may 2019 18 may 2020 18 may 2021 and 18 may 2020. Service tax shall be imposed on the date of renewal and every 12 months after the renewal date. A service tax of rm25 is imposed upon activation of new principal or supplementary cards and on the anniversary renewal date every year including on existing cards in issuance as at 1 september 2018 i e. The tax stood at rm50 for principal credit cards and rm25 for supplementary cards.

Of the taxable service as determined under section 9 of sta 2018. The payments landscape of malaysia will change over the next 12 24 months due to the re introduction of card service tax effective september 2018. Example 3 a new credit card is issued on 18 may 2018 with a validity period for five years. The rate of service tax on the provision of credit card or charge card services is.

All active credit and charge cards in malaysia will be charged with rm25 service tax as imposed by the royal malaysia customs department. Out of that number 9 million cards are principal credit cards 1 1 million are supplementary cards with remaining being charge cards. Attrition of credit cards will rise and new issuance of credit cards will drop.