Paid Television Broadcasting Services (PTBS) are widely known as pay-TV services means the transmission of video, audio and all other programming services to subscribers.
Example of PTBS provider are ASTRO, iflix, HyppTV and Vision Four.
Service Tax is charged on:
(i) any provision of taxable services;
(ii) provided in Malaysia;
(iii) by a registered person; and
(iv) in carrying on his business
Provision of PTBS are taxable services. PTBS provider shall charge service tax at 6% to the subscriber of services in Malaysia.
Service tax will be charged depending upon the principal place of business of the service provider.
Example 1
A customer living in Langkawi (DA) subscribes a pay-TV from a provider based in Kuala Lumpur.
The provision of pay-TV by the provider is subject to service tax for the services provided in Langkawi.
Service Tax Treatment
PTBS provider is one of the categories of taxable service providers. For the purpose of service tax, the taxable supplies by PTBS provider are as follows:
(i) Supply of TV package to customers; Pay-TV service provider makes a supply of PTBS to subscribers based on agreed scheduled fee (eg: monthly fee, pay-per-view charge).
(ii) Supply of Satellite TV Box / Set-top box (STB); STBs are generally supplied to customers on activation basis.
Subscriber activates STBs in his name on the payment of activation charges from a service provider. Service tax will be paid at 6% on activation fee charged to subscribers.
Other Related Services Made for the Provision of Pay-TV
Other related services relating to the provision of Pay-TV will also attract 6% of service tax, includes:
(i) Change/Upgrade of package;
(ii) Installation/re-installation (reactivation) fee charged to the recipient;
(iii) Repair charges;
(a) Repair charges on the STB or equipment related to the provision of pay-TV collected from subscriber are subject to service tax.
Scenario: Repair services carried by appointed vendor on behalf of PTBS provider.
A registered person is responsible to:
(i) Charge service tax on taxable services;
(ii) Issue invoices and receipts with specific particulars;
(iii) Submit service tax return SST-02 electronically and pay service tax before the due date; and
(iv) Keep proper records
Q : How does service tax on prepaid services supplied by PTBS provider?
A : Prepaid services supplied by PTBS are subject to service tax.
Q : Is Njoy installation subject to service tax?
A : Yes, Njoy installation is subject to service tax.
Q : Is the sale of Njoy prepaid card subject to service tax?
A : Yes, the sales are subject to service tax because with the prepaid card customer may enjoy pay-TV services.
Q : Is the sales value of prepaid card inclusive of service tax?
A : Yes, the sales value of prepaid card inclusive of service tax. If the prepaid card value is RM5, service tax will be at (6/106) x RM5 = RM0.28.
Q : Does Njoy need to issue an invoice with regards to the sale of prepaid card?
A : Yes, Njoy needs to issue an invoice with regards to the sale of prepaid card. However Njoy may apply not to issue invoices for the sales of prepaid card from Director General of Customs.
Q : The PTBS provider charge an upfront payment for one year of service. When should the PTBS provider account service tax for the services?
A : The PTBS provider should account for service tax when payment received from the customer even though the service has not been rendered.
Q : Would the service tax be applicable on the distribution of free TV services?
A : No, free TV services supplied free of cost to any party should not be liable to service tax.
Q : Is there any service tax charge for viewing channel / streaming at additional device provide by the provider?
A : Yes, it is subject to service tax if the service is chargeable by the provider.
Q : What is the tax treatment when a PTBS provider allows the viewing channel / streaming on extra devices for free?
A : No, free viewing channel / streaming on extra devices is not subject to service tax.
Q : Is specific channel subscription on pay-per-view basis subject to service tax?
A : Yes, the services are subject to service tax.
Read more: AirAsia BigPay (E-Wallet) - Sign Up Today To Get RM 10 Free Credit !
Edited by: 浪子
Bibliography
Royal Malaysian Customs Department. (2018). Guide On Paid Television Broadcasting Services. Retrieved from https://mysst.customs.gov.my/assets/document/1.%20Guide%20on%20Subscription%20B~1%E2%80%8E.pdf
SST - Guide on Paid Television Broadcasting Services
Reviewed by 浪子
on
September 01, 2018
Rating:
Reviewed by 浪子
on
September 01, 2018
Rating:
