Gaming Tax Malaysia

(c) gaming machines operated by clubs and casino such as jackpot and slot machines; (d) gambling in casino; and (e) raffles. Presently, the gaming industry in Malaysia is subject to taxes such as gaming tax, pool betting duty, betting and sweepstakes duty, and state sales tax (in Sabah and Sarawak). I’ve done my Malaysia Gambling Tax best to put together the following listing of free casino bonuses which should suit your needs the most. The list is based mostly on your country, as many bonuses are only valid to Malaysia Gambling Tax players from certain countries. However, other ranging factors, such as the bonus value and the casino's rating, have been added into the mix as well.

From 1 September 2018, the Sales and Services Tax (SST) will replace the Goods and Services Tax (GST) in Malaysia.

Here are the details on how the SST works - the registration process, returns and payment of the SST and the transitional measures to take after the abolishment of the GST.

(i)The SST will be a single-stage tax, where the sales ad valorem tax is charged upon taxable goods manufactured and sold by a taxable person in Malaysia and taxable goods imported into Malaysia. Service tax is charged on taxable services provided in Malaysia and not on imported or exported services;
(ii)taxable persons are defined as manufacturers of taxable goods or providers of taxable services with annual turnover exceeding MYR 500,000. A taxable person is also a person who provides taxable services (e.g. hotel, insurance, club, gaming, telecommunication, legal, accounting, architectural, security, etc) in the course of furtherance of business in Malaysia and is liable to be registered or is registered under the Service Tax Act 2018;
(iii)sales tax will be imposed at the rate of 5%, 10% or a specific rate for petroleum products and the service tax will be at the rate of 6%;
(iv)SST returns are required to be submitted on a bi-monthly basis to RMCD (Royal Malaysian Customs Department);
(v)registered persons are required to keep relevant records of SST submissions for a period of 7 years, (a) in Bahasa Melayu or English, (b) in Malaysia except permitted by DG (Director General) to be kept outside Malaysia, and (c) in soft or hard copy;
(vi)where services span over both the GST period and the Services Tax period, the invoicing for the services must be apportioned between the 2 periods (i.e. before 1 September and from 1 September onwards).

SST: The finer details

Registration process for GST and non-GST registered persons

For both GST and non-GST registered persons, the registration for the SST has to be done online through MySST system. Existing GST registrants are automatically ceased to be liable for registration under the GST when the GST Act 2014 is repealed. They are not required to apply for deregistration, but they are required to submit the final GST return within 120 days from the Act being repealed. The existing GST registrants who are automatically liable to be registered under the SST will be informed through a notification letter on the personal/business email starting from 1 August 2018.

Registration done through the MySST system is auto-approved within 24 hours for GST registrants however, if a verification process is required, it may take a little longer. The company can proceed with the voluntary registration provided it is manufacturing taxable goods and is below threshold. If the person is exempt from registration, they can proceed with voluntary registration.

Process to submit Sales Tax returns

Registered manufacturers and persons must declare SST returns (SST-01) every two months according to the taxable period. They may apply to the Director General for a specific taxable period (e.g. in line with the financial year end). SST return has to be submitted no later than the last day of the following month after the taxable period has ended in order to avoid any penalty (10% first 30 days period, 15% second and third 30 days period, 40% after 90 days).
SST returns have to be submitted electronically or by post to SST Processing Centre, and has to be submitted regardless of whether there is any tax to be paid or not.

Transitional considerations

GST registrants are allowed to claim input tax credit within 120 days from when the SST goes into effect. GST registered persons must account for GST at 0% and declare the output tax in their final GST-03 return. Special schemes under GST such as Approved Trader Scheme (ATS), Approved Toll Manufacturer Scheme (ATMS), etc. are not applicable under SST. After 1 September 2018, audits for closure purposes will be carried out on GST registered entities.

Goods and services exempt from payment and facilities under SST

• Exemption on goods and persons
  (i)Goods: e.g. live animals, unprocessed food, vegetables, medicines, machinery, chemicals, etc. List of exempted goods can be found here.
  (ii)Persons:
  (a) Class of person, e.g. Ruler of States, Local Authority, Inland Clearance Depot,
  (b) Manufacturer of specific non-taxable goods, with exemption of tax on the acquisition of raw materials, components, packaging to be used in manufacturing activities,
  (c) Registered manufacturer, with exemption of tax on the acquisition of raw materials, components, packaging to be used in manufacturing of taxable goods.

• Exemption from registration
  Manufacturing activities exempted from registration regardless of turnover, e.g. tailor, jeweller, optician, engraving, vanishing table top, etc.

• Special treatment for specific areas
  Applicable to designated areas such as Labuan, Langkawi and Tioman, and special areas such as Free Zone, Licensed Warehouse, Licensed Manufacturing Warehouse and Joint Development Area.

• Contra System
  A registered person is allowed to deduct the service tax in his return for any cancellation and termination of services or any other reasons as reducing premiums or discounts.

Updated on 20 August 2018

Service tax – taxable services proposed

On 8 August 2018, the Royal Malaysian Customs Department (RMCD) issued a list of proposed taxable services for service tax purposes. The list also provides a comparison of the taxable services and registration thresholds between the old service tax regime and the upcoming regime. The taxable services are summarised as below.

Reinstated service providers and services liable for service tax:

• With respect to accommodation providers, night clubs, public houses, beer houses, health or wellness centres, massage parlours, private clubs, golf clubs and driving ranges:
  • all services, including sales of food, drinks and tobacco products
• With respect to restaurant operators, caterers, food court operators, etc.:
  • all services, including prepared or served food or drinks;
  • sales of tobacco products; and
  • sales of alcoholic and non-alcoholic drinks
• With respect to telecommunications and paid television service providers:
  • telecommunications and related services other than the provision of services to other telecommunications providers; and
  • paid television broadcasting services
• With respect to advocates, solicitors and shariah lawyers:
  • legal services and other charges in connection with such services
• With respect to public accountants:
  • the provision of accounting, auditing, bookkeeping, consultancy and other professional services and charges related to such services
• With respect to parking operators:
  • the provision of parking spaces for motor vehicles
• With respect to advertising:
  • the provision of advertising services in Malaysia
• With respect to credit card and charge card service providers regulated by Bank Negara Malaysia:
  • a flat rate of MYR 25 is imposed on the issuance of principal or supplementary cards and every subsequent year or part thereof; and
  • the flat rate is not applicable to fuel cards and charge cards issued in a closed community (i.e. educational institutions or sports clubs)

Newly introduced service providers and taxable services under the new regime

• With respect to betting and gaming providers:
  • sweepstakes, lotteries, gaming machines or games of chance;
  • tournaments involving betting or games of chance; and
  • conducting or allowing the conduct of card games or any other games by a casino operator
• With respect to transmission and distribution of electricity:
  • electricity provided to domestic consumers for usage of more than 600 kWh (i.e. the first 600 kWh is exempt) for a minimum billing cycle period of 28 days
• With respect to airline operators licensed under the Malaysian aviation regulations:
  • domestic passenger air transport services and all services in connection with such services, with the exception of air transport routes specified under the Rural Air Services Agreement
• With respect to information technology services providers:
  • all types of IT services, excluding sales of goods in connection with the provision of services and provision of IT services outside Malaysia

In general, service providers rendering taxable services are liable to be registered if the total annual amount of taxable services provided exceeds MYR 500,000. The registration threshold is MYR 1,000,000 for restaurant operators, caterers, food court operators, etc.; no registration threshold is imposed for credit card and charge card service providers.

Full details are available on the RMCD's website.

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In Malaysia our gambling laws are quite interesting. Resorts World Genting is reachable in about one hour from our capital Kuala Lumpur by train. This is where Monte Carlo Casino, Hollywood Casino and StarWorld Casino are located. It is however illegal for 60% of our population to use these casinos – specifically Muslims. The same applies to other forms of gambling here too.

In this article I’ll explain the laws, what forms of gambling are legal, and how this differs for Muslim and non-Muslim. If you are interested in Online Betting from Malaysia there is a Part II article that you can read on the bottom of this page.

Betting Act 1953 and Exemptions

The primary law that regulates gambling in Malaysia is the Betting Act of 1953. This was amended in 1958, 1959, 1961, 1989, 1992 (twice), and 2006. The link provided is to the current copy which includes all amendments.

This Act is about 20 pages and is written in simple easy to understand English. While there are many laws and very little is left out, let me mention the primary law for players. Here the penalty for unlawful gambling is set at “a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding six months or to both.”. It also includes much stricter laws for those involved in operating, promoting or having any non-player involvement in gambling businesses.

There are however many forms of legal gambling under the Betting Act. It specifically states the penalties do not apply to approved and licensed gambling. As mentioned in the intro to this article, for that we have legal casinos that are available. We also have legal pari-mutuel horse race betting due to the Racing (Totalizator Board) Act 1961. Lottery is legal here too which originally government owned has been private since 1985. You can learn about that at www.sportstoto.com.my.

Sharia Law Applies to Mulsims

The legal forms of gambling mentioned above are mostly designed to target Chinese (about 1/3 our population), other minorities, and tourists. Under Malaysian law all ethnic-Malays are required to be Sunni Muslim. They are therefore subject to Islamic Law which makes gambling a serious crime. For those not familiar with this take a look at Penang’s Syriah Criminal Offences Enactment of 1996.

The above link is a decent scan for anyone not familiar with Malaysian Law. Here you will find penalties for enticing a female person, abuses of halal sign, preventing a married couple from cohabiting, and all sorts of items not typically found in Common Law. Section 18 sets the penalty for Muslims caught gambling at a fine up to 3000 ringgit, or 2-years imprisonment, or both.

The above is only an example from one of Malaysia’s 13-states. However, each and every state has similar laws. Each state also has an Islamic Religious Affairs Department, whom among other agencies, enforce Islamic Sharia law. Even Muslim tourists are subject to these laws. There have been recent cases of Indonesian and Pakistani men arrested while on holiday for visiting casinos that are legal to about 40% of the population.

Political Climate of Malaysia

This article might misrepresent Kuala Lumpur. This is actually a very friendly city to live. However there are some strange situations here. Since 2000, all video games have been banned in the country. Today there are internet cafés with closed circuit televisions to watch for police raids while games are played inside. In 2010, Malaysian gaming group Berjaya (BGRO.KL) announced it was purchasing a 70% stake in Ascot Sports Sdn Bhd for 525 million ringgit. It was claimed Ascot had been issued a license to launch sports betting in Malaysia. Soon later there were protests and shortly after that the government denied any such license had ever existed.

This is all best explained as: in Malaysia we have many Muslims opposed to gambling. There are constant outcries and protests even over the legal forms of gambling we have already. It was said in a news article not too long ago that it seems every couple days the police are launching a new attack on Chinese gamblers. This explains it well from my perspective as daily something or another is being protested.

Gaming Tax Hike Malaysia

Online Gambling is Easier

The good news is it still possible to use overseas online gambling sites from the privacy of one’s own home without issue. For example www.bodog88.com is a post up betting site based in the Philippines that offers casino, sports betting, poker and Mahjong to Malaysia residents.

Players can deposit online or at the ATM using direct bank transfer. When they win, cash outs can be requested to the same method. The banks supported by Bodog Malaysia include Maybank, Public Bank, CIMB, RHB, Standard Chartered Bank, Hong Leong Bank, Affin Bank, EON Bank, Alliance Bank Malaysia, AmBank, Citibank, OCBC Bank, HSBC Bank, and United Overseas Bank.

In a country where the next gambling protests seem always around the corner, using gambling located in the Philippines from one’s own home is stress free and a much welcomed change.

Gaming Tax Act 1972 Malaysia

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