Preparing For Malaysian GST
Helping you get a head start on GST compliance
GST is Complex
GST is complex because it is a multi-stage tax, collected at every stage of the production and
distribution chain when the purchase or sales of goods and services are involved. As a business
owner, it is imperative to determine correctly what GST processes best suit your business to
maximise input tax credit, and avoid penalties.
Malaysia GST System at a Glance
s
Quick Facts
s
Compulsory for businesses with
annual turnover of > RM500,000
1 APR 2015
s
Types of Supplies
Taxable Supplies
Standard
Rated Supply
Zero-Rated
Supply
Non-Taxable Supplies
Exempt
Supply
Out-of-Scope
Supply
Depending on the nature of your business, you will have to charge GST on different supplies.
The key is to determine which of your supplies are subject to GST, and which are not.
GST Has
Far-Reaching
Implications
Producer A
Producer B
s
Pay net GST
to Customs /
Claim GST
Refund from
Customs
Getting a head start in familiarising yourself with the concepts
and principles of GST is crucial as it has significant impact on
your tax filing. It would be wise to start realigning your business
and resources now, so you can hit the ground running when GST
is officially implemented.
Your supplier charges
you 6% input GST
on goods & services
Business
Owner
Output Tax Input Tax
= Net GST Payable
s
Pay net GST to
Customs
Distributor/
Retailer
You charge 6%
output GST on
goods & services
Input Tax
Output Tax
= Net GST Refundable
s
Pay net GST to
Customs / Claim
GST Refund from
Customs
s
Claim GST Refund
from Customs
Royal Malaysia Customs
Producer B
Benefits of GST Compliance
Producer A
Some examples of Non-GST Compliance
Deliberately fail to register for GST
Late filing of GST returns
Over-claim input tax
Under-declare net GST payable
Claim back input tax (where applicable)
Reduce cost of doing business
A responsible business owner
For the betterment of the nation
Commit offences / Incur penalties
Fine
Potential prosecution and imprisonment
Or both
footnote:
GST Compliance
Non-GST Compliance
Reap the benefits of being GST compliant
Impact of GST on Business Functions
Many perceive that understanding GST is the sole responsibility of the finance department, which is
not true. It is imperative that all departments in the business understand the concepts and principles
behind GST, and how it affects the respective functions of the business.
The range of what is and what is not taxable under the GST is overwhelming. Identifying and planning
for the onset of GST and aligning all your business functions to be GST compliant is a challenging
task. As a business owner, you need to put in place a system and sufficient human capital to ensure
the smooth transition to total compliance.
Examples of Issues Faced by Various Business Departments
Accounting System:
IT Hardware & Software
Accurate capture of GST info
Education & Training
•
GST compliant system
Integrated with each department and
ready to handle transactions, whether
these are affected by GST or not
Scalability when the business grows
and/or diversifies
•
Human Resource
Finance & Admin
Educate and train employees to
make good GST decisions on
behalf of their respective departments
• Optimise employee benefits
(maximise input tax for benefits
provided)
• Cash flow impact and optimisation
Develop skills to minimise GST impact
• GST efficiency on remuneration
package
• Amendment of documents
• Minimisation of compliance costs
• Maximisation of input tax claims
• Obtain appropriate registration
• Prepare for implementation date
• Apply for appropriate special scheme
Data conversion from old to new system
system
RM
Legal
Marketing & Sales
Purchasing
Corporate strategy
• Drafting and amendments of contracts
• Effect on prices
• Vendor selection
• Structuring of GST-efficient deals
• Renewal of contracts in line with
GST implementation
• Price strategies
• GST-efficient corporate structure
• Inclusion of tax clauses
• GST-efficient sales promotion
• Efficient procurement strategy to
minimise irrecoverable input tax
• GST rates for different goods & services
• Maximise input tax claim
• Minimise GST compliance costs
• Tracking of contracts for transitional
issues
GST impacts all areas of operations. Our advice to business owners is to prepare early by aligning your
resources to be GST compliant, ensuring a better position in which you can make sound business
decisions that will benefit the entire organisation once GST takes effect.
Crowe Horwath Can Help You
Understand the Implications of GST
At Crowe Horwath, your business is our focus. Our dedicated team of GST experts can help you craft a
tailored GST implementation solution based on your unique business needs, whilst minimising impact and
interruptions to your day-to-day operations. From staff training and project management to periodic health
checks to ensure compliance, we work with you every step of the way as you get ready for the onset of GST
in April 2015.
Our Expertise
• Identify and analyse key areas affected by GST
• Conduct transactional analysis
• Advice on how to maximise operational and tax efficiency
• Methods to minimise compliance costs
• Advice on mitigating adverse effects on profit and cash flow
Our Suggested Timeline
Phase 1
Pre-GST
(Approximately 2-3 months)
Phase 2
Pre-Implementation
(Approximately 3-6 months)
Phase 3
Objective:
Identify all functions that will be impacted by GST,
and train employees to maximise input tax claim.
Objective:
Prepare the platform to ensure smooth transition
to total GST compliance.
Objective:
Refine approaches to maximise benefits and
minimise compliance costs.
• Educate and train your employees about GST
• Form a project team to address all matters in
relation to GST
• Conduct pre-GST implementation study
• Conduct transaction analysis and impact
studies
• Conduct operational and business review
• Review past and current contracts and
documentation
• Review of strategic issues
• Conduct gap analysis
• Advice on system modification
Internal controls
Common errors
System features
• Advice on contracts and documentation
modifications
• Draw up GST manual and provide training
• Advice on price setting
• Liaise with Royal Malaysia Customs
• Implement systems trial run
• Assist with GST registration
• Advice on transitional issues
Post-GST
(within 2 months of implementation)
• Submission of GST returns
• Liaise with Royal Malaysia Customs on
payments or refunds of GST
• GST health check
Our Team in Kuala Lumpur Office
Crowe Horwath has 12 offices across Malaysia, headed by partners with expertise in taxation and GST
planning. For more information, please contact the individual offices as per below.
Poon Yew Hoe
Fennie Lim
Nickson Choo
Mananging Partner
Crowe Horwath Malaysia
Tax Executive Director
Crowe Horwath Malaysia
Director
Crowe Horwath Malaysia
GST Experience:
GST Experience:
GST Experience:
• Advised & implemented GST projects
in Cambodia & Malaysia since 2005
• Advised & implemented GST
projects since 2005
• Completed full GST course
conducted by Royal Malaysia Custom
• Completed full GST course
conducted by Royal Malaysia
Custom
• Completed full GST course
conducted by Royal Malaysia
Customs
• Accumulated experience dealing
with GST in Australia, Singapore &
Cambodia
• Accumulated experience dealing
with GST in Australia & Singapore
Wong Man Yee
Jonathan Doy
Chan Wai Choong
Associate Director
Crowe Horwath Malaysia
GST Partner
Crowe Horwath Australia
GST Executive Director
Crowe Horwath Australia
GST Experience:
GST Experience
GST Experience:
• First person to be made equity
partner at a Big Four firm when
GST was first implemented in
Australia
• Advised & implemented GST
projects since 1998
• Completed full GST course
conducted by Royal Malaysia
Custom
• Accumulated experience
dealing with GST in Australia &
Singapore
• Contributed to the development of
GST laws, and the interpretation
and practice of GST law especially
in the fields of property, retail,
health, and public sectors
• Previously served as GST
Director in a Big Four firm prior
to joining Crowe Horwath
• Familiar with UK VAT system,
having worked there for 3 years
• Sucessfully resolved multi million
dollars ATO disputes and refund
matters for his clients
Our Partners in Other States
Michael Ong
Ng Kim Kiat
Christabel Chieng
Principal
Crowe Horwath Klang
Partner
Crowe Horwath Muar
Partner
Crowe Horwath Labuan
Patrick Wong
Eddie Wee
Chai Tze Chek
Partner
Crowe Horwath Melaka
and Johor Bahru
Partner
Crowe Horwath Kuching
(Brighton Square)
Partner
Crowe Horwath Kuching
(Petanak)
Eddy Chan
Michael Tong
Matthew Wong
Partner
Crowe Horwath Penang
Senior Partner
Crowe Horwath Kota Kinabalu
Partner
Crowe Horwath Miri
Lau Hin Siang
David Lau
Partner
Crowe Horwath Bintulu
Partner
Crowe Horwath Sibu
Chai Voon Huei
voonhuei.chai
Amanda Lim
amanda.lim
Siow Kwi Fong
kwifong.siow
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