Recently, when setting up the new Malaysian GST, I took to the task assuming that it would be nice and simple and done in a few hours, following the same structure as I would for Singapore which has one of the more simplistic GST setups in Oracle R12 or Fusion. It did not take long however to realize that Malaysia was a complete different animal when it came to the GST solution.
At its bare minimum, there is a 6% GST and a 0% GST rate but unfortunately, as those that know about indirect taxation, its not just about the tax rate but why and as such, VAT or GST is also about information as to why you are charging a certain rate or to provide statistical information to the relevant tax authorities. As such, there are well over 20 different GST tax reporting codes that need to be considered that need to be included on the GST returns for Malaysia.
Indeed, the Malaysian GST was based on the tax regimes of the UK, Singapore and Australia and that is very evident as there is more of a European style with the requirements for reverse charging than anything like Singapore GST.
So before you foolishly go ahead and set the MY GST up in the footprints of SG GST, make sure you do your research and get the right advice or you will soon fall foul of the Malaysian Customs when you start submitting those GST returns.
For more information on Malaysian GST please see our previous posts.
Review of ‘E-Business Suite R12: Malaysia Goods and Services Tax (GST)
Are you ready for the 2015 Malaysian GST?