Telecommunication services can be divided into two categories:
(i) Basic telecommunications which are the transmission of voice or data from sender to receiver;
(ii) Value-added services, for which Telco adds a value to the telecommunication services.
Basic telecommunication services include end-to-end emission, transmission or reception of sound, data, text, visual images, signals or any other form or any combination of those forms. Such services also include:
(i) Fixed network voice telephone
(ii) Analog/digital cellular/mobile telephone
(iii) Satellite Telecommunication
(iv) Internet and other digital data transmission
(v) Network component rental, sales and service
(vi) Network access and network facilities
(vii) International telecommunication basic infrastructure
(viii) Wireless paging
(ix) Resale of basic telecommunication
Value-added telecommunication services are based or depending on the infrastructure facilities for the provision of basic services or other services without having to build its own infrastructure network. Such services also include:
(i) Fixed telephone network value added services
(ii) Mobile network value added services
(iii) Satellite network value added services
(iv) Internet value added services
(v) Other data transmission network value added services
In value-added telecommunication services, providers add value to the customer's information by enhancing its form or content or by providing for its storage and retrieval.
Service Tax Treatment on Telecommunication Services
In general, all telecommunication providers who are registered under Communication and Multimedia Act 1998 that provide telecommunication services in Malaysia to its subscribers are subject to service tax. This includes outbound roaming services provided by any Malaysian telecommunication providers to the subscribers outside Malaysia. However, the provision of telecommunication service to other telecommunication service provider in Malaysia or outside Malaysia is not subjected to service tax.
Responsibility of Registered Person
A registered person is responsible to:
(i) Charge service tax on taxable services;
(ii) Issue an invoice and receipt to the customers in respect of any transaction relating to the provision of taxable services;
(iii) Submit service tax return SST-02 electronically and pay service tax before due date;
(iv) Keep proper records.
Q : Does the installation of internet connection considered as telecommunication services?
A : Yes. The installation of internet connection is considered as telecommunication services if it is charged by the telecommunication provider.
Q : Is roaming service subjected to service tax?
A : Yes. Roaming services provided by Malaysian telco (Telco) to its subscribers, whether the roaming services is provided in Malaysia or outside Malaysia is subject to service tax
Q : Are telecommunication services by a Malaysian telecommunication provider to a telecommunication provider outside Malaysia subject to service tax?
A : No. Telecommunication services by a Malaysian telecommunication provider to a telecommunication provider outside Malaysia is not subject to service tax.
Q : Is prepaid service subject to service tax?
A : Yes. Prepaid service is subject to service tax.
Q : Are Over-The-Top (OTT) telecommunication services such as Whatsapp, Facebook, Telegram, if being charged, subject to service tax?
A : Yes. Over-The-Top (OTT) telecommunication services such as Whatsapp, Facebook, Telegram, if being charged are subject to service tax.
** OTT is the term used for the delivery of network services via the internet.
Q : Is outbound call subject to service tax?
A : Yes. Outbound call is subject to service tax.
Q : Is the reverse charge called subject to service tax?
A : Yes. Reverse charge call is subject to service tax.
** A reverse charge call is a phone call which is paid for by the person who receives the call, rather than the person who makes the call.
Q : Are toll-free services subject to service tax?
A : Yes. Toll-free services are subject to service tax.
Q : Are telecommunication services between special area (SA), from SA to the designated area (DA) and from DA to SA are subject to service tax?
A : Yes. Telecommunication services between special area (SA), from SA to the designated area (DA) and from DA to SA are subject to service tax.
Q : Are the public phone services subject to service tax?
A : Yes. Public phone services are subject to service tax.
Q : What is the service tax treatment on the provision of telecommunication services by the Malaysian Telecommunication provider to telecommunication services outside Malaysia?
A : The provision of services is not subject to service tax.
Q : International Direct Dialing (IDD) is a term used to describe an international telephone call dialed by a caller rather than going via operators. Abu a Malaysian telecommunication’s subscriber made IDD calls to his friend in London. What is the tax treatment for such provision?
A : The provision is subject to service tax.
Q : Roaming is defined as the ability for a cellular customer to automatically make and receive voice calls, send and receive data, or access other services when travelling outside geography coverage area of the home network, by using a visited network. What is the tax treatment on the provision roaming services by Malaysian Telco to its subscribers?
A : The provision is subject to service tax.
Q: Content application services is a provision of contents through messaging service and is accessible either on mobile access device or fixed access device through Application Store. What is the tax treatment on provision of the contents by a telecommunication in Malaysia?
A : The services are subject to service tax.
Q : What is the tax treatment for the provision of subscriber identification module (SIM) card bundles with a certain value of credit (air time) in Designated Area?
A : The services are subject to service tax.
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Edited by: 浪子
Bibliography
Royal Malaysian Customs Department. (2018). Guide On Telecommunication Services. Retrieved from https://mysst.customs.gov.my/assets/document/1.%20Guide%20on%20Telecommunication%2021082018_rev5.pdf
Collins Dictionary. (n.d). Reverse Charge Call. Retrieved from
https://www.collinsdictionary.com/dictionary/english/reverse-charge-call
SST - Guide on Telecommunication Services
Reviewed by 浪子
on
August 31, 2018
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Reviewed by 浪子
on
August 31, 2018
Rating:
