GST Frequently Asked Questions (FAQs) Section A : · PDF fileGST Frequently Asked Questions...
Transcript of GST Frequently Asked Questions (FAQs) Section A : · PDF fileGST Frequently Asked Questions...
GST Frequently Asked Questions (FAQs)
FAQs for GST-Version 4.0 January 2015 Page 1
Section A : General Information on GST
1. What is a GST?
A Goods and Services Tax (GST) is a consumption tax based on the value-added
concept. GST is charged on any taxable supply of goods and services made in the
course or furtherance of any business by a taxable person in Malaysia. GST is also
charged and levied on the importation of goods and services into Malaysia.
2. What is the rate of GST that will be imposed?
6%
3. Are all goods and services subject to GST?
Not all goods and services will be subjected to GST. Certain basic food and
amenities are free from tax, i.e. zero rated. In addition, certain supply of goods and
services such as financial services and healthcare services are determined by the
Government as exempt supply. For more information, please refer to the following:
i) Goods and Services Tax (Zero-rated Supply) Order 2014
http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20141013_P.U.%2
0(A)%20272%20-
%20Perintah%20CBP%20(Pembekalan%20Berkadar%20Sifar)%202014.pdf
ii) Goods and Services Tax (Exempt Supply) Order 2014
http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20141013_P.U.%2
0(A)%20271-
perintah%20cukai%20barang%20dan%20perkhidmatan%20(pembekalan%2
0dikecualikan)%202014.pdf
4. Do all businesses need to be registered under GST?
Any person who makes a taxable supply for business purposes and the taxable
turnover of that supply for a period of 12 months or less exceeds the threshold of
RM500,000 is required to be registered for GST. However, business with taxable
turnover of RM500,000 and below may choose to apply for voluntary registration.
For further enquiries, kindly refer to this official GST website :
http://gst.customs.gov.my/en/cu/Pages/cu_ccc.aspx
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5. How does GST work?
In Malaysia, a person who is registered under the Goods and Services Tax Act 2014
is known as a “registered person”. A registered person is required to charge GST
(output tax) on his taxable supply of goods and services made to his customers. He
is allowed to claim input tax credit on any GST incurred (input tax) on his purchases
which are inputs to his business. Thus, this mechanism would avoid double taxation
and only the value added at each stage is taxed.
6. Where can I obtain more information about the GST mechanism in Malaysia?
Please refer to the official website of the Royal Malaysian Customs Department
(RMCD) at http://gst.customs.gov.my/ for more GST-related information, legislation
and guidelines.
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Section B : GST information about Bursa Malaysia (‘Bursa’)
1. Is Bursa a GST registered person?
Yes, Bursa and its subsidiaries are registered as prescribed under the GST with
requirements of RMCD. The following are the respective registration numbers:
No. Name of Company Registration Number
1 Bursa Malaysia Berhad 001799364608
2 Bursa Malaysia Securities Berhad 000830267392
3 Bursa Malaysia Securities Clearing Sdn Bhd 002002501632
4 Bursa Malaysia Derivatives Berhad 001064173568
5 Bursa Malaysia Derivatives Clearing Berhad 001446649856
6 Bursa Malaysia Depository Sdn Bhd 001730162688
7 Bursa Malaysia Information Sdn Bhd 001159364608
8 Bursa Malaysia Islamic Services Sdn Bhd 001165811712
2. What are the GST treatments of fees charged by the Bursa Group?
With effect from 1 April 2015, Bursa will charge GST at the standard rate of 6%
(where applicable), as governed by the GST Act 2014. The schedule of fees
charged by the Bursa Group includes, but not limited to, the following:
Bursa Group Type of fees
Securities Market (All fees are standard rated, that is 6%)
Trading fee
Clearing fee
ISS fee
Buy-in commission
Admin Fee - Failed Securities Contract
Fees for Securities Borrowing & Lending
Listing fee
Depository services fee
Information service *
Participants fee
Access fee
Central Matching Facility fee
Fees relating to Clearing Guarantee Funds
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Bursa Group Type of fees
Derivatives Market (All fees are standard rated, that is 6%)
Trading fee
Clearing fees
Clearing House Services fees
Membership fees
Information services & Market Data*
Islamic Market – Bursa Suq Al-Sila' (BSAS) (All fees are standard rated, that is 6%)
Trading fee
Access fee
Administrative fee
Islamic Market – Sukuk & Bonds (All fees are standard rated, that is 6%)
Listing fee
Islamic Market – Exchange Traded Sukuk & Bonds (ETBs) (All fees are standard rated, that is 6%)
Trading fee
Clearing fee
Listing fee
Public Issue Fee
Labuan International Financial Exchange (LFX) (All fees are Out of Scope, not subjected to GST)
Application fee
Renewal fee
Listing fee
Regulations (All fees are standard rated, that is 6% except for transfer fees & fines which are Out of Scope, not subjected to GST)
Perusal fee
Processing fee
Access fee to Bursa Link
Technology Systems (All fees are standard rated, that is 6%)
Installation fee
Network equipment rental
Access fee
Co-location*
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Bursa Group Type of fees
Others (All fees are standard rated, that is 6%)
Rental
Knowledge Centre - Membership fees, service fee, sale of publication and corporate souvenirs
Tender fee
Events – Sponsorship income, participant fee and registration fee
CBRS III – Research coverage services
*Note: If charged to a non-Malaysian, it may qualify for zero rated (subject to conditions prescribed in the GST legislation).
3. Is the buying and selling of shares subjected to GST?
The buying or selling of shares is an exempt supply as set out in the Second Schedule of the Goods and Services Tax (Exempt Supply) Order 2014 i.e. when a share is bought or sold there will be no GST on the gross contract amount, which is price x quantity of the securities. However, the supply of services relating to the buying and selling of shares such as clearing and settlement, brokerage etc. for which fees or commission are charged, will be subject to GST at the standard rate of 6%.
4. Are the fines imposed under the Rules of Bursa subjected to GST?
No, fines imposed under the Listing Requirements and all Business Rules of Bursa
Group of Companies are not within the scope of GST, as such, not subjected to
GST.
5. Is late payment interest subjected to GST?
No, late payment is not within the scope of GST, as such, not subjected to GST.
6. What is the treatment of interest income given back to the brokers?
Interest income is exempt for the purposes of GST.
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7. Will Bursa Malaysia issue tax invoices?
Yes, as Bursa Group of Companies has registered with the RMCD, Bursa will issue tax invoices for its taxable supply of goods and services.
8. If I am a non-Malaysian trading Bursa’s products, will I be charged GST on the services rendered in Malaysia?
Yes, as a non-Malaysian trading on Bursa’s products, you will be charged GST at
the standard rate of 6%.
9. If my membership tenure in Bursa’s Knowledge Centre overlaps 1 April 2015,
is the said membership fee subjected to GST?
GST will take effect from 1 April 2015. As such, the proportion of membership fee
after 1 April 2015 is subject to GST. However, your payment made before the implementation of GST is deemed inclusive of GST.
10. Are transfer fees imposed on Participating Organisations (“POs”) for the
recruitment of experienced dealers representatives from another PO subjected to GST? No, the above transfer fees are out of the scope of GST.
11. I am a non-Malaysian client subscribing to Bursa's Technical Infrastructure
Services (TISA - rental model) and Bursa's co-location services, why is the co-location service fee qualified for zero-rated but the TISA fee is subject to GST at standard rated?
To qualify for zero-rated treatment, the relevant services must be prescribed in the
GST (Zero-rated Supply) Order 2014 (“the Order”). As the co-location services relate
to the provision of a physical environment for the operation of the computer server
equipment in Malaysia of a computer server equipment belonging to a non-
Malaysian (as per clause 19, Second Schedule of the Order), the fees are qualified
for zero-rated treatment. However, TISA is not prescribed in the Order, as such,
GST at standard rated will be applied.
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12. What is the contractual relationship between the clearing participant and the
Clearing House?
Section 51 of the Capital Markets And Services Act 2007 (“CMSA”) states that where a participant in his capacity as such enters into any transaction with an approved clearing house, the participant shall be deemed to be a party to that transaction as principal.
13. Why is collateral management fee subjected to GST?
GST will be applicable where there are services rendered. The collateral
management fee is for services performed by the Clearing House for managing the
brokers’ collateral funds and hence will be subject to GST.
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Section C : GST Information Specific to the Derivatives Market
1. What are the fees that are subjected to GST in the derivatives market?
The fees and charges below are subjected to GST.
A. Trading
B. Clearing
C. Clearing House Services Fee
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D. Membership Fees – Trading Participant / Clearing Participant/ Associate
Participant & Registered Representatives
E. Information Services & Market Data
Fees charged to foreign customers are zero-rated if they meet the conditions in
the GST (zero-rated supply) Order 2014
Type GST Treatment Domestic Traders
GST Treatment Foreign Traders
Fixed Fees
Derivatives – Real Time Standard Rated Zero-rated
Derivatives - Delayed Standard Rated Zero-rated
Derivatives - EOD Standard Rated Zero-rated
Non-display Data Usage Standard Rated Zero-rated
Service Facilitators Standard Rated Zero-rated
Variable Fee
Derivatives – Real Time Terminal Standard Rated Zero-rated
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2. Are any of the fees zero rated?
Market data provided to non-Malaysian customers (See Note)
Bursa’s co-location services to non-Malaysian customers (See Note)
Note - It is not subject to GST if the non-Malaysian customers meet the conditions in
the GST (zero-rated supply) Order 2014. [Also refer to Section B Question 2]
3. Are non-Malaysians trading in Bursa’s products subjected to GST?
Based on the GST (Zero rated supply) Order 2014, services rendered to non-
Malaysians in relation to Bursa’s products are subject to GST. [Also refer to Section
B Question 5]
4. Please explain the GST invoicing and collections process.
Bursa will be implementing the invoicing and collection of GST in two phases:
A. Phase 1
Takes effect on 1 April, 2015
GST will be processed by Bursa Finance Department
Collection and invoicing will be managed by Bursa Finance on a
monthly basis save for tender value on physical delivery
B. Phase 2
Tentatively 3rd quarter 2015
GST will be processed in the Derivatives Clearing & Settlement
System (“DCS”)
GST invoice will be made available in the DCS for viewing, printing
and archiving
Collection and invoicing will be managed by Bursa Malaysia
Derivatives Clearing (“BMDC”)
Daily eFIX files for GST will be made available
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5. Please explain the payment process on GST during phase 1?
A. Trading fees, Clearing fees and Clearing House Service Fees
GST will be invoiced on the first day of the following month, on a monthly
basis with a credit term of T+7 (before 6.30pm)
For trading fee, GST to be paid into Bursa Malaysia Derivatives (“BMD”)’s
operations account
For clearing fee and clearing house services fee, GST to be paid into
BMDC’s operations account
B. Tender value
For physically delivered commodities, given its large value, it will be
invoiced as and when the delivery takes place. The Buying Clearing
Participant must self compute and pay for the GST portion on tender
amount for each physically settled contract, before delivery can take place
GST to be paid into BMDC’s settlement account with respective
settlement banks and GST amount must be separated from settlement /
tender amount
The timing is as follows:
Process Timeline
1 Selling Clearing Participant to issue invoice to BMDC
T + 1 by 4.00 pm
2 Buying Clearing Participant to pay GST T + 2 by 8.45 am
3 Bursa Finance to issue invoice to Buying Clearing Participant
T + 2 by 4.00 pm
4 Clearing House to pay GST to Selling Clearing participant
T + 2 by 4.00 pm
C. For all other fees (e.g. market data), a tax invoice will be issued by Bursa
Finance and the GST inclusive amount must be settled within the due date stated
in the tax invoice
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6. Please explain the payment process for GST for Phase 2.
A. Trading fees, Clearing fees and Clearing House Service Fees
GST to be paid into BMDC’s settlement account with the respective
settlement banks and GST amount will co-mingle with the settlement /
tender amount
The timing is as follows:
Process Timeline
Invoice available in DCS system T + 1 after 7.00 am
Clearing Participant to pay GST T + 1 by 8.45 am
B. Tender amount
GST to be paid into BMDC’s settlement account with the respective
settlement banks and GST amount will co-mingle with the settlement /
tender amount
The timing is as follows:
Process Timeline
1 Selling Clearing Participant to issue invoice to BMDC
T + 1 by 4.00 pm
2 Invoice available to the Buying Clearing Participant in the DCS system
T + 1 after 7.00 am
3 Buying Clearing Participant to pay GST T + 2 by 8.45 am
C. For all other fees (e.g. market data), a tax invoice will be issued by Bursa
Finance and the GST inclusive amount must be settled within the due date stated
in the tax invoice
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7. Why is the delivery of a commodity under a physically settled contract
subjected to GST?
Under the Goods and Services Tax (Exempt Supply) Order 2014, transfer of
ownership of futures contract or transfer of ownership of derivatives relating to
commodities is exempted from GST. However, settlement of futures contracts by
way of physical delivery of commodities is subject to GST at standard rated.
8. What price will be used for GST computation, upon delivery of a commodity
under a physically settled contract?
GST is computed based on tender amount. The reason is to standardise the
pricing applied for the buyer, seller and Clearing House.
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9. Can you explain the process flow of the GST on tender amount on physical
contract and the parties who need to issue the tax invoice?
10. Please explain the tax invoicing process for Phase I and 2 of Bursa’s implementation of invoicing and collection of GST?
In Phase 1, the tax invoice will be issued by Bursa Finance on a monthly basis at
the beginning of the following month. The tax invoice will reflect the monthly fees
by type of fees, rebates and total GST amount payable, amongst others.
In Phase 2, the DCS system will be automated to allow daily invoicing.
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11. How will brokers reconcile the daily and monthly settlement in the DCS?
In Phase 1, prior to the enhancement of DCS, the monthly GST billed to brokers
will tie to the aggregate amount of the daily GST.
In Phase 2, the calculation of GST will be automated on a transactional and daily
basis. The daily statements can be reconciled to the brokers’ daily transactions.
12. Are initial and variation margins subjected to GST?
Initial and variation margins are not supply of services by Bursa and hence these
are not subjected to GST.
13. What is the treatment for give up and take up trades?
For commission on give up and take up transactions, BMDC will only facilitate
the commission if it is configured in the DCS. GST, if applicable, will be settled
between the two parties on their own.
For all other fees related to the transaction, i.e. exchange and clearing fees,
BMD/ BMDC will continue to charge and issue the tax invoice to the take-up
broker.
14. Is option premium subjected to GST?
No, option premium is not subjected to GST
15. Where is the GST obligation spelt out?
Consequential to the implementation of the Goods and Services Tax Act 2014,
BMD Rules and BMDC Rules will be amended to impose an obligation on
relevant participants to pay GST. The non payment of GST would result in action
being taken against the relevant participants under the relevant set of rules