/// Contributor
Richard Oon
Real Estate Taxation
Expert
Richard Oon is the National Tax
Director of TY Teoh International,
a member firm of the MSI Global
Alliance, which is one of the world’s
largest independent associations of
accountancy and law firms. Richard is
a member of the Malaysian Institute of
Accountants (MIA), a fellow member of
the Association of Chartered Certified
Accountants (ACCA), a fellow member of
the Chartered Tax Institute of Malaysia
(CTIM) and also a Certified Financial
Planner (CFP). He has more than
20 years experience in the taxation
industry and holds a tax agent licence
issued by the Ministry of Finance under
Section 153 of the Income Tax Act
1967.
Goods & Services Tax
and The Property Investor
W
hile presenting the recent Budget 2014, Prime Minister Datuk Seri NajibRazak announced
the introduction of the Goods and Services Tax (GST) and when enacted, GST will be effective
from 1 April 2015 and standard rated supplies will be subject to GST at a rate of 6%. With the
introduction of GST, the current indirect taxation systems of sales tax and service tax will be abolished
on the same date.
What is GST?
GST which is also known as the ‘value added tax’ (VAT) in many countries, is a multi-stage consumption
tax on goods and services, which ultimately falls on the final consumer.GST is levied on the supply of
goods and services at each stage of the supply chain from the supplier up to the retail stage of the
distribution. Even though GST is imposed at each level of the supply chain, there is no compounding tax
effect, regardless of the number of stages a product or service undergoes in the supply chain, as GST
is only charged on the value added element at each stage in the supply chain. This is achieved through
net of ‘output tax’ (the GST on the goods and services sold by you) minus ‘input tax’ (the GST you paid
on the raw materials, equipment and services used in your business) mechanism adopted under the
GST administrative process.
Stages
Sales Price
(Before GST) RM
Input Tax
RM
Output Tax
RM
Net GST Paid
RM
10.00
-
0.60
0.60
50.00
0.60
3.00
2.40
80.00
3.00
4.80
1.80
100.00
4.80
6.00
1.20
Supplier
Manufacturer
While the author makes reasonable
efforts to present information which
he believes to be reliable, the author
makes no representation that the
information or opinions contained in
this article is accurate and complete.
Readers are advised to seek specific
professional advice before acting on
the views.
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www.PropertyHunter.com.my
Wholesaler
Retailer
Customer
End Result
100.00
6.00