Malaysia: Amendments to service tax regulations expand intra-group relief and update taxable services

The Service Tax (Amendment) (No. 2) Regulations 2024 expand intra-group relief to cover maintenance or repair services and update the scope of taxable services.

• The expansion of intra-group relief to cover maintenance or repair services within the same group of companies, both locally and internationally, is effective retroactively from May 1, 2024. It is yet to be determined if businesses that qualified for group relief can seek refunds for service tax paid since that date.
• The updates to the definition of taxable services, which are effective November 27, 2024, include:
  • Revision to the definition of a taxable person under Group C (nightclubs, dance halls, cabarets, karaoke centre, health and wellness centres, massage parlours, public houses, and beer houses) to exclude operators of premises or healthcare facilities managed by registered practitioners under the Traditional and Complementary Medicine Act 2016
  • Update to the definition of  taxable service under Group E for golf clubs and driving ranges to specify the provision or sale of alcoholic and non-alcoholic beverages by removing the word “food”
  • Amendment to exclusion for maintenance or repair services under Group G to specify services for goods and equipment fixed to residential structures, provided directly to the owner or occupant, but services provided through intermediaries do not qualify for the exclusion and remain taxable

Read a November 2024 report prepared by the KPMG member firm in Malaysia