PETALING JAYA: Following last-minute revisions to the Sales and Service Tax (SST) that include an increased threshold for certain sectors, affected registered businesses are allowed to revoke their SST registration.
A Finance Ministry spokesperson said that companies that have registered for SST but are affected by the revision announced on Friday can file for deregistration.
The spokesperson told The Star that the deregistration application could be made to the Customs Department.
The ministry also said that the audit requirements for deregistration remain.
However, a partner at Owen KLCA PLT Christine Koh said that this would be an additional administrative burden for businesses that had taken earlier steps to register.
“Some businesses in newly expanded areas that are not aware of the Finance Ministry’s interpretation (of the law) are worried that they would be subject to a penalty if they did not charge SST from tomorrow.
“They may have registered in June. However, due to the increase of the threshold, these businesses may need to apply for deregistration, if not, they would be regarded as voluntary registration and need to comply with SST requirements,” she added.
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Koh said that businesses are required to provide supporting documents, which include audit reports, to prove their annual turnover is below the revised threshold if they plan to deregister from SST.
She added that only after the deregistration by the Customs Department is approved, the business is no longer required to charge or remit the tax.
Koh added that the affected businesses that did not apply for deregistration would need to continue charging SST and remit the tax to the Customs Department.
On Friday, the Finance Ministry announced revisions on the expanded SST, which is due to begin tomorrow.
Among others, the annual sales threshold for mandatory Service Tax registration has been raised from RM500,000 to RM1mil for leasing, rental, and financial services.
Koh suggested that the implementation of the expanded SST be deferred to next year, to ensure businesses are better prepared with the last-minute changes.
Among those in dilemma was a property investor who only wanted to be known as Madam Yew, who had expanded her rental business and registered for SST earlier.
“I keep to the law and pay my taxes because I want the banks to lend me more money for more investments.
“I predicted my rental business hitting the half-million mark later this year and quickly registered for SST,” said Yew, who owns several commercial properties.
Yew said she was told deregistration should be done since the turnover threshold has been revised.
“I was told I may need an audit before I can deregister. I don’t know what to do now,” she said, adding that she would wait for her accountant’s advice.
Tax expert Thenesh Kannaa of TRATAX said that any business that has already added rental to its list of taxable services in the mySST portal may update their profiles to remove rental from the list of taxable services, provided the annual value of taxable services is below RM1mil.
“For businesses which are not service tax registered, the option to apply for registration for new services was only open from June 28, as they are given leeway until Aug 31 to apply for registration and start charging SST from Sept 1 onwards.
“Given that the announcement for the higher threshold was already made on Friday, there should not be cases of redundant applications for registration,” he said.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong said the Customs Department would do its due diligence to ensure that companies fulfil the requirements.
“However, in any case, if the company had already registered and find out later that their products or services are exempted, they can file for deregistration,” he said.
Koong also proposed that the expanded SST should be delayed to January next year to allow smoother implementation.
He said the six-month period should be adequate for the government to get feedback and better communicate their policies to the businesses.
“We also hope that the government does not provide us with piecemeal information which could confuse businesses and the public,” he added.
