Service Tax (Amendment) (No. 2) Regulations 2024

The Service Tax (Amendment) (No. 2) Regulations 2024 has been gazetted to make amendments to the Service Tax Regulations 2018 (“STR 2018”), which include amongst others the long-awaited expansion of intra-group relief to also cover the provision of maintenance or repair services. 

Please click on the above header link for a copy of the Amendment Regulations. 

We set out below a summary of the key amendments:- 

• Paragraphs 3 and 3A of the First Schedule of STR 2018 

The provision of maintenance or repair services within the same group of companies by both a local company as well as a company outside Malaysia (imported taxable services) qualifies for intra-group relief.  Note that these amendments are effective retrospectively from 1 May 2024.  It remains to be seen whether businesses who qualified for group relief are allowed to seek a refund for Service Tax paid since 1 May 2024. 

• Taxable person under Group C:  Night-clubs, dance halls, cabarets, karaoke centre, health and wellness centres, massage parlours, public houses and beer houses

Taxable person under Group C is amended to also exclude any person operating any premises or healthcare facility managed or operated by a registered practitioner under the Traditional and Complementary Medicine Act 2016 [Act 775] who practices traditional and complementary medicine in a recognized practice area, effective 27 November 2024. 

• Taxable service under Group E: Golf club and golf driving range

Item (d)(vi) of the taxable service under Group E is amended to “The provision or sale of alcohol and non-alcoholic beverages” by deleting the word “food”, effective 27 November 2024. 

• Taxable service under Group G, Item (n):  Maintenance or repair services

The exclusion of taxable service in respect of maintenance or repair services is amended to “maintenance or repair services for the goods and equipment fixed to the structure of a residential house and the maintenance or repairs services are provided directly to the owner or occupant of the residential house”, effective 27 November 2024.  It appears that maintenance or repair services provided through another person even though it ultimately benefits the owner of the residential house would not qualify for such exclusion and hence would be a taxable service. 

Evelyn Lee
Partner
evewflee@kpmg.com.my
+603 7721 2399

Crystal Chuah Yoke Chin
Associate Director
ycchuah@kpmg.com.my
+603 7721 2714

Regina Lau
Partner
reglau@kpmg.com.my
+603 7721 2188

Titus Tseu
Executive Director 
titustseu@kpmg.com.my
+603 7721 2822

Ng Fie Lih
Partner 
flng@kpmg.com.my
+603 7721 2514