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What are the taxable and non-taxable services in Malaysia? (Part II)

Taxable persons and services under the Second Schedule of the Service Tax Regulations 1975 are:
Group B1: Restaurants located in a hotel having more than 25 rooms
Taxable Persons Taxable Services
Operators of restaurants, bars, snack-bars, coffee houses or places which provide food, drinks or tobacco products, whether wholly eat-in or partly take-away, located in hotels with more than 25 rooms. Provision of:
  • sale of food, drinks or tobacco products;
  • services in the form of "corkage", "towel charge" or "cover charge";
  • parking spaces for motor vehicles where parking charges are imposed;
  • payments to jockeys for valet parking services which are part of parking charges;
  • catering services;
  • premises for meetings or for promotion of cultural or fashion shows.
Non-Taxable Services
Provision of:
  • payments to jockeys for valet servicing your car;

Group B2: Restaurants located in a hotel having 25 rooms or less
Taxable Persons Taxable Services
Operators of restaurants, bars, snack-bars, coffee houses or places which provide food, drinks or tobacco products, whether wholly eat-in or partly take-away, having a total annual sales turnover of more than RM300,000 and located in hotels having 25 rooms or less. Provision of:
  • sale of food, drinks or tobacco products;
  • services in the form of "corkage", "towel charge" or "cover charge";
  • parking spaces for motor vehicles where parking charges are imposed;
  • payments to jockeys for valet parking services which are part of parking charges;
  • catering services;
  • premises for meetings or for promotion of cultural or fashion shows.
Non-Taxable Services
Provision of:
  • payments to jockeys for valet servicing your car.

Group C: Restaurants located outside a hotel
Taxable Persons Taxable Services
Operators of restaurants, bars, snack-bars, coffee houses or places which provide food, drinks or tobacco products, whether wholly eat-in or partly take-away, having a total annual sales turnover of more than RM3 million and located outside a hotel excluding a canteen located in an educational institution or operated by a religious institution.

Operators of food courts and having a total annual sales turnover of more than RM300,000.
Provision of:
  • sale of food, drinks or tobacco products;
  • services in the form of "corkage", "towel charge" or "cover charge";
  • parking spaces for motor vehicles where parking charges are imposed;
  • payments to jockeys for valet parking services which are part of parking charges;
  • catering services;
  • canteens at National Service Training Programme Centres (PLKN);
  • premises for meetings or for promotion of cultural or fashion shows.
Non-Taxable Services
Provision of:
  • catering services only (without restaurant);
  • payments to jockeys for valet servicing your car.


Service tax will be abolished on March 31, 2015 with the implementation of Goods and Services Tax (GST) on April 1, 2015.


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Knowledge Base ID :   1544
Last Reviewed :   June 26, 2014
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