Taxation – Facts Behind Malaysia E-Commerce

Tax is certain in life and issues arise from taxation can be very thorny to individuals and even to the people of the country. Over the centuries before World War II, taxation forms major revenue for the country through the monetary contributions from local businesses and service providers. Three years back in Malaysia, a new integrated taxation system is implemented to replace the existing Sales and Service Tax (SST) that is called the Goods and Service Tax (GST). However, mitigation to GST is not elimination of SST. GST has become the periodic necessity or perhaps the only choice for everyone that involves in transactions.

With fast emerging market in the e-commerce platform, Malaysia has improved to be one of the worldwide borderless technology hub for many. Following the changing patterns of import and export within the country and across the world, undeniably Taobao has become the biggest e-commerce marketplace for online shoppers. Therefore, any goods brought into the country by mean of sales or self-use will be charged an “Import Duty”. The same applies for goods sold outside the country.

On top of that in the view of online shoppers, our main focus is to educate our customers on the tax imposed on goods purchased from another country since it involves additional dollars and cents. Let’s us bring you on the following briefs.

ALERT!

Most of the time when we purchase stuffs from the shop or nowadays the online shops, we often overlook the hidden cost behind the price tags especially when we are purchasing outside of Malaysia as in Taobao website. Often you will see shipment and parcel delayed caused by the Custom’s detention. Coming up would be all the frustrations and “how-to get my parcel out from there?” Our advice be as below:

  1. Keep calm when you are notified that your parcel is hold by Custom.
  2. Contact your custom clearance company, tax agent or the transporter.
  3. Receive a consignment note from your custom clearance company, tax agent or the transporter.
  4. Pay the amount stated.
  5. Parcel released and you will be notified for the estimated time of arrival.

Side notes: It is advisable to request the seller to attach the invoice together with the delivery note in order to ease the detention. If you purchase through a legitimate Taobao agent such as SGshop, contact them for further details. Their assistance will constantly save you time and unnecessary hassles. They will restrain you from heading up and down to the post office and clearance counter to meet up with people that you are hardly known. If you are lucky to handle all these hassles yourself, you will find yourself ending up a day time. Oppositely, such situation will take up more than a day due to heavy flow of pending status. Gentle reminder for you that no card payment is available for clearance services and always remember to bring extra cash with you just in case you did not the amount to be paid. In short, let the professionals do their best for you! The only thing you should know is the NEXT button, i.e. to make sure you get back your parcel!

It Is All About “Money, Money, and Money!”

Perceptively, if a problem can be solved by paying money and it should not be a problem at all! Oppositely the question is “How much?” Picture below serves as an example received from our transporter merely for reference.

Content Photo

  • Goods and Service Tax (GST)

Goods and Service Tax (GST) is the new implemented fiscal policy to sterilize the purchasing power among the consumers. It is a one flat rate system imposes on all the relevant goods purchased and services provided within Malaysia. GST is categorized as Standard-Rated Supplies, Zero-Rated Supplies, Exempt Supplies and Supplies not within the scope of GST. In short, most of the items purchased outside Malaysia is fall under the last category, “Supplies not within the scope of GST”. Therefore, the GST is herewith defined under the regulations based on the open market value, the senders, and foreign exchange values. It could be a one-off 6% taxed or if you are lucky, you will be taxed none.

  • Import Duty

Import Duty by it is named, is taxes when importing goods from outside to Malaysia whether it is by private individuals or commercial entities. It is as though like paying any tolls or entry fees in order to arrive at the gateway of Malaysia. Let’s check out more at the below for furtherance.

Bear in mind that the above sharing is merely based on the understanding of regulations. For further details, kindly refer Malaysian’s Customs Tariff  website.

  • Electronic Data Interchange (EDI)

IF you did not request an attachment of invoice or purchase order together with your parcel delivery, you might be seeing this Electronic Data Interchange charges in your bills. EDI charges is the coordination fees paid to your tax agent, custom clearance company or your transporter as they will have to request on behalf of you from the seller all the relevant documentations in order for your parcel clearance. Different transporters impose different rate of charges. In another word, if you choose to self-collect for own clearance, always remember the invoice attachment and you are guaranteed to skip this charge. Gently reminder for you is to bring along extra cash as no card is accepted for parcel clearance at the counter.

Side notes: Parcels that are shipped as gifts must be declared in order for tax relief. However, gifts with value more than RM 500 is deemed as an offer exchange and receiver is bounded to pay GST.

Taxation can be complicated or simplified on your decisions in the e-commerce industry. We are welcomed your reviews and sharing more on this discussion. Give us a Like and help us to share for reaching out more people.

Thank you for your reading.

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