Imported Service - SST ( Non Register)

This Article is suitable for:

• ABSS Premier v23.1
• ABSS Accounting v28.1

Starting from 1^st January 2019, any person who carries on business in Malaysia (including in designated area and free trade zone) who obtains chargeable service from any service provider from outside Malaysia shall pay service tax included for non SST Register.

Let say oversea chargeable service is RM 2000 (after converted to Malaysia), so the taxable import service is RM 120.

How to record imported service from oversea supplier.

1) Setting up the IMN tax code

• Go to list > Tax codes >click on IMN
• Inside the rate field, kindly change the default rate from 6% to 0%. For import tax rate field, put the default rate as 6%. ( may refer the image below)

         

2) Record the overseas supplier.

• Kindly go to purchases > enter purchases > select the oversea supplier.
• Enter your purchase amount example USD 500 with the exchange rate on that day ( example 4.0)
• The tax code is IMN. ( May refer the image below)

 

   As per the image above, you can see the total supplier invoice is US$500 or RM 2000. IMN does not           affect your total supplier invoice  

3) Record the payment

Import services are under service tax, so it always based on cash basis transaction. Import services will only capture inside SST 02A report once you record the payment to the oversea supplier. To record the payment, kindly go to purchases > pay bill > enter the payment exchange rate ( example 3.5).

Once you enter the payment exchange rate is 3.5, so the total amount that you pay is RM 1750. ( 500 x 3.5). The total imported service that you need to declare to the Royal Malaysian Customs Department ( RMCD) is RM105 (6% from 1750).

Once you generate the SST 02A detail, you may see the amount IMN will appear in field 10a. ( as per below)

4) Create Import services account - Expense

• Import services in under your expenses. To record the payment to RMCD, you need to create Import Services under expense account. To create the import services, kindly go to Accounts > Accounts List > Expense > new account.

5) Record payment to Royal Malaysian Customs Department ( RMCD)

     At the end of the SST period, you need to record the Import services amount to RMCD. To record the         payment, kindly go to Banking > Spend Money. ( Record as per image below)