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Malaysia Issues GST Guidance On Gifts

by Mary Swire, Tax-News.com, Hong Kong

15 December 2017


The Malaysian tax agency on December 1 released guidance on whether gifts provided for no consideration can be excluded from the goods and services tax (GST) net.

Under paragraph 5(2)(a), First Schedule of the Goods and Services Tax Act (GSTA) 2014, the transfer or disposal of business assets as gifts are not subject to GST if:

  • The acquisition cost of goods by the donor does not exceed RM500 (USD12.25);
  • The supply of gifts is done within one year; and
  • The gifts are given to the same recipient.

If the supply of gifts does not qualify under the outlined conditions, that supply of gifts will become a supply or transfer of business asset under paragraph 5(1), First Schedule, the GSTA 2014 and subject to GST.

Under paragraph 5(2)(b), First Schedule of the GSTA 2014, any gifts in the form of samples not ordinarily available for sale to the public for business purposes are also not subject to GST.

The guidance explains whether GST is liable in 15 example situations.

It also discusses the case of BPCL v. Director General of Customs (Case No. 14/2015), in which the appellant provided products to a distributor for them to be later gifted to consumers. They were supplied by BP to the distributor for no consideration but were deemed to be a supply subject to GST.

TAGS: tax | business | goods and services tax (GST) | Malaysia | services

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