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),
