• Second in SEA, helping pave the way for the rest

With the decision to begin taxation on global digital businesses, Malaysia has become the second country in Southeast Asia (SEA) to consider doing so, right after Singapore.

Our two countries are both expected to begin implementing the tax come Jan 1, 2020, potentially alongside EU nations who are currently in the midst of heavy debate on how their digital taxes will sway.

As mentioned before, the federal government has guided that additional digital tax components may be rolled out in March 2020, following guidance from OECD as they are currently studying the issue.

While it is still unclear on how the digital taxes may end up being implemented in the EU, a report by tax advisory Ernst Young (EY) entitled “Scaling the digital divide” indicated that the current debate of digital tax is not about large corporations earning stateless income or avoiding taxes, but rather, it is about the division of tax rights among countries who consider that their citizens contribute to the profits made by some digital focused companies.