Only Fee-based Financial Services Subject To 6% GST
Financial services such as cash deposits, cash withdrawals, loans, bonds, late payment charges, finance charges, and interest earned from savings or fixed deposits are exempted from the Goods and Services Tax (GST).
Only the processing fees charged by registered financial institutions to perform these services would be subject to 6% GST.
Money withdrawn through an ATM will not be subject to GST, but the charges for MEPS will be charged 6%. Regardless of how much you withdraw, the tax will be imposed on the RM1 charged by banks for the MEPS, coming up to RM1.06 after GST.
As for overseas online purchases, instead of the existing sales tax, 6% tax would be imposed on the total value of the product after calculating its cost, insurance and freight (CIF ) value and import duty.
Consumers may see some savings in this area with GST, as sales tax currently ranges from 0% – 10% depending on the item.
To obtain the list of GST treated financial products and services, consumers can visit Association of Banks in Malaysia’s official website.
More GST-related information, legislation, guidelines and services, consumers can go to Customs Department’s GST’s official website.
Still not clear on how GST works? We’ve simplified it for your here.