TRANSITION GUIDE TO THE CHANGES IN THE SERVICE TAX RATE FROM 6% to 8% (SST 2024)
In accordance with subsection 10(2) of the ACP 2018, the Minister of Finance has set the service tax rate to be increased from 6% to 8% (SST 2024) from 01 March 2024 on all existing taxable services except:
a) food and beverage services;
b) telecommunication services; and
c) parking space provision services.
GENERAL CONCEPTS OF CHANGES IN TAX RATE (Taxable Services Provided)
- The determination of the service tax rate for taxable services provided shall be based on the date the service is provided.
- In the event that taxable services are provided in full before the effective date of the tax rate change, taxable services are charged at the old rate.
- In case the taxable service is fully provided on/after the effective date of the tax rate change, the taxable service is charged at the new rate.
- In the event that taxable services are provided before the effective date of the tax rate change and beyond the effective date of the tax rate change, the service tax rate shall be apportioned as follows:
a) taxable services provided before the effective date of the tax rate change are subject to service tax at the old rate; and
b) taxable services provided on/after the effective date of the tax rate change are subject to service tax at the new rate.
However, regardless of the registered person's service tax accounting basis, whether payment basis or invoice basis, any payment received before the effective date of the tax rate change in relation to any service provided on/after the effective date of the tax rate change, payment is subject to the old rate.
Sample scenario for SST 2024 Update:
Read this article to know more about this update: PANDUAN PERALIHAN PERUBAHAN KADAR CUKAI PERKHIDMATAN
