22/02/2024
Dear Valued Clients,
Following the national fiscal (Budget 2024) announcement, the proposed Service Tax (ST) rate will be increased from the current rate of 6% to 8% effective from 1st day March 2024, on selected taxable services including the legal services sector.
At this point, Tee & Teoh (“the Firm”) has outlined a tentative approach to the proposed increase in Service Tax, pending further clarifications and implementation guidelines from the relevant Ministry and the Royal Malaysian Customs Department.
During this period, the Firm reserves the right to update or modify the information as deemed necessary.
1. Effective Date
The effective date for the implementation of the new tax rate (8%) is 1st day of March 2024.
2. Transitional rules for the proposed increase in Service Tax rate
a. Service Tax at 6% is applicable on taxable services provided before 1st day of March 2024; Service Tax at 8% is applicable on taxable services provided post 1st day of March 2024.
b. Taxable services spanning 1st day of March 2024:
• Service Tax at 6% for the portion of taxable services provided before 1st day of March 2024
• Service Tax at 8% for the portion of taxable services provided post 1st day of March 2024
• For the payment that we received before 1st day of March 2024 for the taxable services rendered before and after 1st day of March 2024 shall be subjected to Service Tax at 6%.
Should you have any queries or require further clarification on this matter, please feel free to reach out to us. We highly value our client relationships and are dedicated to ensuring a seamless transition through these changes.
