Face Book to start collecting 6% digital tax in Malaysia from January 2020

Facebook has announced that they will collect 6% service tax on the sale of ads in Malaysia starting 1st January 2020. This is in line with the introduction of service tax on digital services that was first announced last year. According to Facebook’s notice, this will affect advertisers that have set their “Sold to” country on their business or personal address to Malaysia. The service tax will be added whenever you’re charged for the ad regardless if it is purchased for business or personal purposes. The social media platform also mentions that if the payment for the ads is done manually, the tax will be applied when your ad account is funded. They gave an example if you’ve spent USD 100 for ads and if you’ve reached your USD 100 billing threshold, you will be charged USD 100 in ad cost with USD 6 (6%) service tax on top of that. Both Google and AWS have made similar announcements for customers in Malaysia. From 1st January 2020, all digital services, including download/streaming of content, music, video, or digital advertising will subject to a 6% digital tax. The tax is aimed to level the playing field for local businesses and it is estimated that the Malaysian government will collect RM2.4 billion each year.

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