This blog is a continued series. Part 1 was focused on importation of taxable goods to Special Areas and we’ll be focusing on exportation to SA in this blog.
As Sales and Service Tax (SST) had replaced the Goods and Service Tax (GST) in Malaysia since 1st September 2018. There are certain areas that are designated as tax-free zone and they are referred as Special Area (SA). You can refer to part 1 of this blog series to know more about goods transported or imported into SA.
For reader’s convenience, here is the explanation for terms used in this article:
- Free Zone (FZ)
- Principal Customs Areas (PCA)
- Licensed Warehouse (LW)
- Licensed Manufacturing Warehouse (LMW)
For exportation or transportation of goods from SA, there are 3 main situations as well: a) goods sold directly to the buyer outside of SA or in PCA, b) goods sold and transported directly to buyer through a trader and c) goods sold through a trader who subsequently export goods to the buyer.
a) Goods sold directly to the buyer outside of SA or in PCA
When a buyer purchase taxable goods from seller in SA and the goods are transported directly to the buyer SA to PCA (refer to Figure 1), sales tax will be imposed on the taxable goods.
Figure 1: Goods transported from SA to buyer in PCA
The buyer will need to declare the importation of goods in the Custom Form.
b) Goods sold and transported directly to an oversea buyer through a trader
When an oversea buyer purchased taxable goods from SA through a trader and the goods are exported directly to the buyer (refer to Figure 2), no sales tax shall be charged on the taxable goods.
Figure 2: Goods exported from SA to Overseas.
The trader will need to declare the exportation of goods in the export declaration form according to the guidelines provided by the Malaysia Royal Custom Department.
c) Goods sold through a trader who subsequently export goods to the buyer
When a buyer purchased taxable goods from SA through a trader in PCA, wher the goods are exported to the trader then only subsequently to the buyer (refer to Figure 3), sales tax shall be charged on the taxable goods exported from SA to the trader in PCA.
Figure 3: Goods transported from SA to PCA through a trader
The trader will need to declare the transportation of goods in the import declaration form according to the guidelines.
In all conditions, if the buyer is SST registered, he or she may claim for exemption from payment of sales tax according to the Sales Tax Order 2018.
Here are some related topics in TreezSoft blog for your further readings:
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