Malaysia: Clarification of extended service tax relief for hotels, accommodation operators (COVID-19)

The service tax exemption has been extended for hotels and accommodation operators.

The service tax exemption has been extended for hotels and accommodation operators.

A temporary exemption from service tax allowed accommodation operators (hotels, inns, lodging houses, service apartments, homestays and any other similar establishments) has been extended through 31 December 2021. The relief is offered in response to the coronavirus (COVID-19) pandemic.

The service tax exemption was previously provided from 1 March 2020 through 30 June 2021, and then extended through 31 December 2021.

The Royal Malaysian Customs Department issued Service Tax Policy 2/2021 to clarify that the service tax exemption for the extended period—from 1 July 2021 to 31 December 2021—is limited to the provision of accommodation premises. All other taxable services provided by accommodation operators are still subject to services tax at a rate of 6%.

Read a June 2021 report prepared by the KPMG member firm in Malaysia 


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