Indirect Tax Alert: Extension of indirect tax payments deadline and automatic generation of late payment penalties in the MySST system during the MCO period

Indirect Tax Alert: Extension of indirect tax payments deadline and automatic generation of late payment penalties in the MySST system during the MCO period

In view of the on-going Movement Control Order (“MCO”), the Royal Malaysian Customs Department (“RMCD”) announced on 29 May 2020 a deadline extension to 30 June 2020 for the full remission of penalties for specific indirect tax payments received by the RMCD. In addition, the RMCD informed that due to certain limitations, late payment penalties will continue to be automatically generated in the MySST system during the MCO period.

The salient points of the above-mentioned announcements are as follows:

  1. Extension of deadline for indirect tax payments
  1. Full remission of penalty for indirect tax payments

►    RMCD has further extended the deadline for the full remission of penalty for indirect tax payments received by the RMCD to 30 June 2020, with respect to the following submissions:

►    Sales tax or service tax (via Form SST-02)

►    Imported taxable service tax (via Form SST-02A)

►    Tourism tax (via Form TTx-03)

►    Departure levy (via Form DL-02)

►    Please be informed that the full remission of penalty applies exclusively to the following taxable periods:

End of taxable periodStipulated due date for the submission of return and payment of taxPayment of tax received by RMCD no later than 30 June 2020
29 February 202031 March 2020Entitled to a full remission of penalty
31 March 202030 April 2020Entitled to a full remission of penalty
30 April 202031 May 2020Entitled to a full remission of penalty

►    Further to the above, RMCD encourages taxpayers to make payments online or through postal services.

  1. Submission of indirect tax returns

►    RMCD has further clarified that no action will be taken for any late submissions of the above-mentioned indirect tax returns with respect to the taxable periods ending 29 February 2020, 31 March 2020 and 30 April 2020.

  1. Automatic generation of late payment penalties eligible for a full remission in the MySST system during the MCO period
  • RMCD has clarified that late payment penalties for the following taxable periods will continue to be automatically generated in the MySST system, in a manner as shown in the table below:-
End of taxable periodDue date to submit return and paymentDate of penalty generated
29 February 202031 March 20201 April 2020
31 March 202030 April 20201 May 2020
30 April 202031 May 20201 June 2020
  • A full remission for the above-mentioned late payment penalties will be made by the RMCD as soon as possible. This will also include any Bill of Demands (“BODs”) issued on penalties which are eligible for a full remission during the MCO period.

The full and complete version of the above announcement on the deadline extension for indirect tax payments (only available in Bahasa Malaysia at this juncture) can be found here, whilst the announcement on the automatic generation of late payment penalties eligible for a full remission in the MySST system during the MCO period can be found here.