Frequently Asked Questions
Service Tax - FAQs For 6% Service Tax Effective 1 September 2018
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GST 6%
From 1 April 2015
→↓GST 0%
1 June 2018 – 31 Aug 2018
→↓Sales & 6% Service Tax
From 1 September 2018As you are aware, the Government has announced that effective 1 Sept 2018, the 6% Service Tax is replacing the Goods and Services Tax (GST) which was at zero percent (0%). Essentially, all provision of telecommunication services by telcos to customers are subjected to the 6% Service Tax. These include IDD calls, telex, video conference, roaming, fax, VoIP, lease lines, bandwidth service, maintenance of facilities, installation, etc.
Here are some frequently asked questions on how the 6% Service Tax will be applied on your telecommunication usages moving forward and some key points on the transition.
General
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Below is how the 6% Service Tax will be applied:
Telecommunication usages
Roaming usages, which were previously non-taxable under GST, is now taxable under 6% Service Tax effective 1 Sept 2018 onwards.
Devices (Smartphones, Modems, Phone accessories)
Telecommunication devices, such as smartphones and modems, are subjected to 5% Sales Tax. The Sales Tax is a single stage tax levied on imported and locally manufactured goods, either at the time of importation or at the time the goods are sold or otherwise disposed of by the manufacturer.However, we will not charge the Sales Tax for any devices purchased at Maxis stores. This is because as a single stage tax, the Government only collects sales tax during importation from the manufacturer or importer.
Content Services
Content services subscription, such as caller ringtones, music videos and sports content, which were subjected to GST, are also subjected to the 6% Service Tax.
Charge to Bill
Charge to Bill are your purchases or subscription with other content or application service providers such as Google Play Store, Apple App Store and others. If you have selected to make these payments through Maxis, your purchase or subscription will be charged to your Maxis bill on a monthly basis or as a one-off charge. Charge to Bill is not subjected to the 6% Service Tax in your Maxis bill – however, your subscription may be subjected to the 6% Service Tax by your service or application provider. -
According to the Sales & Service Tax Act 2018, customers are subjected to the 6% Service Tax for ALL telecommunication services provided by telcos. These include IDD calls, telex, video conferencing, roaming, fax, VoIP, lease lines, bandwidth services, maintenance of facilities, installation, etc.
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Yes. The 6% Service Tax is applicable to anyone who uses telecommunication services in Malaysia.
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Your telecommunication usages at designated areas or duty-free zones are subjected to the 6% Service Tax as prescribed by the Government.
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Yes, the SIM replacement fee is subjected to the 6% Service Tax.
Postpaid (Mobile, Broadband, Fixed)
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As prescribed by the Royal Malaysian Customs Department (RMC), all provision of telecommunication services by telcos are subjected to 6% Service Tax. These include IDD calls, telex, video conferencing, roaming, fax, VoIP, lease lines, bandwidth services, maintenance of facilities, installation, etc.
Transition -
As per your account’s bill cycle, you will be billed with 0% GST for any usage before 1 Sept 2018 while for any usage after 1 Sept 2018, it will be subjected to the 6% Service Tax.
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There is a 6% Service Tax column in your bill and all items that are subjected to the Service Tax will be indicated as 'Y'; while items that are exempted or non-taxable will be indicated as 'N'.
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This is a service fee, therefore subjected to the 6% Service Tax.
Device-related -
The key components of your charges for device-related sign-ups are:
- Device Price – upfront or installment
- Device Advance Payment
- Safe Device, Basic & Premium Protection
- Monthly upgrade fee
- Device Remaining Balance
- Damage fee
Device Price – upfront or installment
Your device payment for normal device contracts, Zerolution and Zerolution360 installments are not subjected to the 6% Service Tax.
Device Advance Payment
Advance payment and earnest amount is a form of commitment for your device contract and it is not subjected to the 6% Service Tax.
Safe Device, Basic and Premium Protection of Zerolution360
These are protection or insurance which you subscribe to cover any damages to your phone and it is not subjected to the 6% Service Tax.
Remaining Balance Penalty
In case you wish to redeem your Zerolution or Zerolution360 prematurely, the Remaining Balance Penalty payable by you is not subjected to the 6% Service Tax as it is a payment for device. -
No. Early Termination Charges are not subjected to the 6% Service Tax.
Prepaid (Malaysian Users)
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This means when Malaysian customers top up a certain amount, they will get the same amount of credit. For example if you top up RM10, you will get RM10 credit.
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The price of a Hotlink SIM pack remains at RM10. Upon activation of the SIM, you will receive a credit of RM5.
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You will not have to pay anything as there is no registration fee.
Prepaid (Foreigners)
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This exemption is not applicable to foreigners. Foreigners will continue to pay the 6% Service Tax.
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The price of a Hotlink SIM pack remains at RM10. Upon activation of the SIM, you will receive a credit of RM5.
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All provision of telecommunication services by telcos for foreigners are subjected to the 6% Service Tax.
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For prepaid, the 6% Service Tax is charged upon activation of each top-up and all top-ups sold will be inclusive of the 6% Service Tax from 1 Sept 2018 onwards. The price remains the same for calls, SMS or when you buy Mobile Internet passes.
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The 6% Service Tax is charged at the point of top-up ticket activation. For example, a RM10 top-up ticket purchased before 1 Sept and activated after 1 Sept 2018, will come with a credit amount of RM9.43.
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Receipt for a top-up ticket will be issued by the retailer. Effective 1 Sept 2018, the 6% Service Tax is applicable on top-up at activation and it will be reflected in your Hotlink or Ookyo e-Statement. There will be no tax invoice issued upon purchase of top-up tickets.
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You will not have to pay anything as there is no registration fee.
Enterprise
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Effective 1 Sept 2018, all provision of telecommunication services by telcos are subjected to the 6% Service Tax. These include IDD calls, telex, video conference, roaming, fax, VoIP, lease lines, MVNO, bandwidth services, billing and collection services, maintenance of facilities, installation, etc.
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The entire service bundle (inclusive of telco services, equipment & maintenance) is subjected to the 6% Service Tax.
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Your voice subscription is subjected to the 6% Service Tax and the equipment is not taxable.
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Yes, the managed service is subjected to the 6% Service Tax.
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Services rendered outside are considered as exported services and are not subjected to the 6% Service Tax.
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No. Telecommunication services rendered at international sites are not subjected to the 6% Service Tax.
