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Service Tax Group G Item 8 - Information Technology Services

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Service Tax Group G Item 8 Information Tecnology Services

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  1. Information Technology is the Use of Any Computers, Storage, Networking and Other Physical Devices, Infrastructure and Processes to Create, Process, Store, Secure and Exchange All Forms of Electronic Data
  2. Service Tax on the supply will be charged at the point of services rendered
  3. IT Services Include:
    • Computing Services;
    • Coding and Programming;
    • Application Development;
    • Software Development;
    • System Integration;
    • Web Development;
    • Platforms;
    • Networks Integration;
    • Data Processing and Administration;
    • Cloud Services;
    • Artificial Intelligence;
    • Internet of Things
  4. Taxable IT services:
    • Provision of software by the software developer;
    • Services relating to the development, customization or provision of computer system (computer system refers generally to IT equipment and software that works together to perform some specified functions);
    • Installation or setting up of computer system;
    • Installation of software into hardware;
    • Software support and maintenance;
    • Periodic payments, subscription or maintenance for continued use and updates website related services, (eg development, customization, maintenance of webpage, websites, web portal and online platforms);
    • Updating to new version, upgrading or modification of data, system or software;
    • Managed data centre services, (eg managed service, connection charges);
    • Digital data services delivered through the internet;
    • Administrative fee for data, system or software;
    • IT advisory or consultation in relation to data and systems (hardware and/ or software)
    • Management on IT;
    • Training services (subject to service tax under Consultancy Services effective 1 January 2019)
  5. Exclude:
    • Charge on storage or co-location of hardware or server;
    • Physical security of hardware or server;
    • Sale and renewal of license for data, system and software by reseller, retailer or distributor of software;
    • Leasing or rental of computer, hardware and server;
    • Assembly of computer, hardware or server;
    • Operating system software embedded in hardware
  6. Effective 01 January 2019, ITS provider granted exemption from payment of service tax on ITS received by him. If:
    • The service that is exempted is an ITS, not other services received by ITS provider;
    • ITS provider who is the recipient of such ITS must be a registered person;
    • The ITS is provided by an ITS provider who is a registered person
  7. Responsibilities of ITS provider under B2B exemption is required to:
    • Issue invoices with the following additional particulars;
      • name and address of the customer;
      • the customer’s service tax registration number;
      • the customer’s total amount of service tax that are exempted
    • Declare the Total Value of Exempted Taxable Services (B2B exemption) to be made in column 18 (c) of SST-02 form.

For more information, kindly refer to https://mysst.customs.gov.my/ or our company Facebook https://www.facebook.com/ycsmanagement/

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