Imported Service - SST ( Register)

This Article is for:

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

Starting from 1^st January 2019, all business owners on business in Malaysia (including in designated area and free trade zone) who obtains chargeable service from any service provider outside of Malaysia shall pay service tax.

Let say overseas chargeable service is RM2000 (after converted to Malaysia Ringgit), so the Taxable Import Service is RM 120.

How to record Import Service from overseas supplier.

1) Setting up the IM6 tax code

• Go to list > Tax codes >click on IM6
• Inside the rate field, kindly change the default rate from 6% to 0%. For import tax rate field, put the default as 6%. ( Refer to the image below)

        

2) Record the overseas supplier.

• Kindly go to purchases > enter purchases > select overseas supplier.
• Enter your purchase amount example USD 500 with the exchange rate on that day ( example the exchange rate is 4.0)
• The tax code is IM6. ( Refer to the image below)

As per the image above, you can see the total supplier invoice is US$500 or RM 2000. IM6 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 in SST 02 report once you record the payment to the overseas supplier. To record the payment, kindly go to Purchases > Pay Bill > Enter the Payment Exchange Rate ( example the exchange rate is 3.5).

Once you enter the payment exchange rate is 3.5, 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 RM 105 (6% from RM 1750).

Once you generate the SST 02 detail, you may see the amount IMV06 will appear in field 11c. ( as below) And in field B1 as well. The tariff code is auto-generate as 687 ( base on RMCD requirement)

4) Create Import Services account - Expense

• Import Services is under your expenses. To record the payment to RMCD, you need to create Import Services in 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)