Sales Tax Exemption on Passenger Cars Ends on 30 June 2022

Currently, Sales Tax exemption has been granted on the purchase of passenger cars as follows:

• 100% on locally assembled passenger cars; and
• 50% on imported passenger cars

from 15 June 2020 to 30 June 2022 (there were a few extensions announced in between).

The Ministry of Finance (“MOF”) has issued a Media Release on 20 June 2022 in respect of the above Sales Tax exemption, which states amongst others, the following:

–       The Sales Tax exemption will end on 30 June 2022; and

–       In view of the global supply chain disruption, to enable purchasers who book the vehicle by 30 June 2022 to still be able to enjoy the Sales Tax exemption, the registration date with the Road Transport Department Malaysia (“JPJ”) for the vehicle is extended until 31 March 2023.

Please click on the above header link for a copy of the Media Release at the MOF’s official portal (only available in Malay language).

The MOF’s initiative in providing a midpoint solution to balance the interests of consumers and managing the national tax revenue by postponing the vehicle registration date would certainly ease the transition period.  However, it appears that certain details require clarification, e.g. what is defined as “book” which qualifies for the exemption?  It remains to be seen on whether there will be further announcement on this matter soon.

Our highlights are intended to provide a general overview of the key proposed tax changes and should not be used or relied upon as a substitute for detailed advice or as a basis for formulating business decisions.

For customized guidance, please do not hesitate to reach out to your trusted KPMG adviser(s),

Soh Lian Seng
Executive Director -
Head of Tax and Head of Tax Dispute Resolution
lsoh@kpmg.com.my
+ 603 7721 7019

Bob Kee
Executive Director -
Head of Transfer Pricing
bkee@kpmg.com.my
+ 603 7721 7029

Tai Lai Kok
Executive Director -
Head of Corporate Tax
ltai1@kpmg.com.my
+ 603 7721 7020

Long Yen Ping
Executive Director -
Head of Global Mobility Services
yenpinglong@kpmg.com.my
+ 603 7721 7018

Ng Sue Lynn
Executive Director -
Head of Indirect Tax
suelynnng@kpmg.com.my
+ 603 7721 7271

Evelyn Lee
Executive Director -
Penang Tax
evewflee@kpmg.com.my
+604 238 2288 (ext. 312)

Crystal Chuah Yoke Chin
Tax Manager -
Ipoh Tax
ycchuah@kpmg.com.my
+605 253 1188 (ext. 320)

Regina Lau
Executive Director -
Kuching & Miri Tax
reglau@kpmg.com.my
+6082 268 308 (ext. 2188)

Titus Tseu
Executive Director -
Kota Kinabalu Tax
titustseu@kpmg.com.my
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director -
Johor Bahru Tax
flng@kpmg.com.my
+607 266 2213 (ext. 2514)