Guide to GST in Malaysia – Things to Consider
The Goods and Service Tax in Malaysia is one which is acted upon every taxable person or entity. In order to provide clarity over the matter, the GST Act of the country has set forth clear and concise regulations which define what a taxable person is. Right in the beginning of the Act there is a clear definition which states that a taxable person is one who is required to be registered under this particular act (Also see 3 Most Common Accounting Mistakes). He is one who makes taxable supplies in the country and he has an annual turnover which exceeds RM500,000. If a person falls within this particular criterion he would be subjected to paying this particular tax.
Even though the regulation sets forth clear definition of the taxable person and the criteria that he would have to abide by in order to be registered under the GST Act, there are further considerations to be taken. There are certain situations under which the person wouldn’t fulfill the criteria to be registered to the GST Act but he might express his desire and intent of doing so. In this case, he would be able to voluntary register under the regulations of the Act. If that’s the situation, he would also be perceived as a taxable person. The solution is fair as there are certain benefits that the GST Act is going to pose that a lot of people might want to qualify for.
Now, even though the definitions of a taxable person are clear and concise, there are also particular criteria for business that have to be abided by in order to be qualified for registration under the GST Act. They are as follows:
- The business has to be a serious undertaking
- It is pursued with reasonable continuity
- It is making supplies of any particular kind
- It is conducted in a proper manner abiding by the overall business-like nature
- It is dominantly concerned with making supplies
In any case, the GST Act sets forth clear taxation regulations which have to be properly abided by all of the entities that are registered under it (Also see Incorporation Of Company : Step 3). Failing to comply with said legislation is going to result in administrative and potentially criminal responsibility which is capable of inflicting serious economic damages to your entire enterprise. That’s why paying the require amount is absolutely mandatory.