Facebook Withholding Tax Malaysia

Heads up ecommerce entrepreneurs digital agencies social media marketers and anyone who spends on online advertising via Facebook Google Ads or even on Amazon Web Services. According to CK Wong co-founder of ecommerce blog ecInsidermy a recent amendment to the Malaysian Income Tax Act 1967 that came into effect on the 17th of.

Should Advertisers Pay Withholding Tax On Google Facebook Advertising In Malaysia Ecinsider

ONLINE PAYMENT OF WITHHOLDING TAX WHT.

Facebook withholding tax malaysia. The sponsor of the non-resident public entertainer is required to pay withholding tax at 15 before an entry permit for the non-resident public entertainer can be obtained from the. In the slide below there is a brief summary of the online payment of WHT methods and. In addition the Payer would be disallowed for tax deduction for the gross amount of the payment made to Non-resident recipient.

The withholding tax in Malaysia is an amount withheld by the party making payment payer on income earned by a non-resident payee. In general all payment to the overseas supplier is required to withhold 10. The same applies for invoices addressed from Spain.

If you are running digital advertising campaigns in Malaysia specifically on Google Facebook or LinkedIn you might want to pay attention to the Withholding Tax WHT. LHDN has clarifies that payments made to Google and Facebook for advertising fall under the scope of royalty instead of payment for services. However most of the digital services provided are not provided in Malaysia and therefore should not attract withholding tax.

In this episode we have Richard from RW William on the show to discuss a hot topic about Withholding Tax in MalaysiaWith more businesses going online and a. Facebook and Google have card as payment method only you are unable to withhold 8 the regross method come in. THK Management Advisory Sdn Bhd - 2 withholding tax on commission - Dec 30 2021 Johor Bahru JB Malaysia Taman Molek Service THK Management Advisory - Our accounting firm specializes in company secretarial practice HR payroll services outsourced bookkeeping and accounting services.

The year 2020 will see a 6 service tax come into effect for digital services such as Facebook ads Googles G-Suite and Adobes software subscriptions in Malaysia. In this case since Malaysia has double tax agreement with Singapore and Ireland withholding tax is tax at lower rate which is 8. He is required to withhold tax on payments for services renderedtechnical advicerental.

The rate is generally tax at 10. Payments made for the right to use of application platform advertising campaign management system such as Google ads and Facebook ads or purchase of software should fall under the scope of royalty instead of payment for services and is subjected to withholding tax if the transaction is provided by a non-resident who has no PE or a business presence in Malaysia. Withholding tax is an amount withheld by the party making payment payer on income earned by a non-resident payee and paid to the Inland Revenue Board of Malaysia.

Beginning January 2020 Facebook ads in Malaysia are subject to a service tax at the applicable local tax rate. Withholding Tax Rate The withholding tax rate for both services and royalties is 10 but depending on the tax treaty between Malaysia and the respective countries the rate may be. Add your service tax identification number in the Payment Settings.

Process for online transfer. Since 2017 LHDN Inland Revenue Board in Malaysia has classified payment to Google Facebook LinkedIn advertising as royalty hence 8 Withholding Tax applies. Under the Malaysia-Singapore DTA agreement Malaysian businesses did not have to withhold payments to Google as the WHT does not apply in the two countries as agreed upon.

Quoting directly from the Inland Revenue Board of Malaysias official website withholding tax is an amount that is withheld by the party making payment payer on income earned by a non-resident payee and paid to the Inland Revenue Board of Malaysia IRBM. Read latest updates here LHDN classifies Google Facebook advertising as Royalty 8 Withholding Tax confirmed For the past few months many business owners here in Malaysia especially those who use foreign Internet services are confused and very worried with the amendments to the Finance Act expanding the scope of withholding tax. This applies to advertisers whose Sold To country on their business or personal address is set to Malaysia.

Impose a penalty of 10 on the unpaid withholding tax. This amount has to be paid to LHDN. That may be a relief but unfortunately the same cant be said for others like Facebook and Amazon.

Methods of payment. However they would not be getting tax deductions on withholding tax borne by them. Remuneration or other income in respect of services performed or rendered in Malaysia by a non-resident public entertainer is subject to withholding tax at 15 on the gross payment.

However for payment to Singapore Google and Facebook Ireland is 8 as Malaysia has a Double Taxation Agreement DTA with the respective countries. In simpler terms if you are paying non-local foreign vendors you need to withhold a certain of the invoiced amount and pay to LHDN as a form of tax and the remaining balance to be paid to. Payer refers to an individualbody other than individual carrying on a business in Malaysia.

Sep 28 2017 LHDN classifies Google Facebook advertising as Royalty with 8 Withholding Tax. You dont have to enter a service tax identification number. To determine the application of withholding tax one of the factors is the status of the tax residence of the service provider and the existence of any business establishment in Malaysia.

LHDN classifies Google Facebook advertising as Royalty 8 Withholding Tax confirmed.

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