On October 18, 2024, the Malaysian Ministry of Finance presented its 2025 Budget, proposing significant reforms to the tax system aimed at broadening the tax base and enhancing revenue collection. Notably, there was no proposal to reintroduce the Goods and Services Tax (GST). Instead, the budget focuses on expanding the Sales and Services Tax (SST) framework, effective May 1, 2025, to include non-essential goods like luxury items and to impose service tax on previously exempt business-to-business (B2B) services.
These changes are designed to align taxation with modern consumption patterns and close existing loopholes. The adjustments are part of a broader fiscal strategy that seeks to balance revenue generation with economic growth. The SST system, which replaced GST in 2018, aims to enhance transparency and efficiency in taxation while supporting Malaysia's economic development.
Malaysian Ministry of Finance 2025 Budget Proposal
Public
Other countries
Author: Ivana Picajkić
Category:
Fiscal subject related
Views:
2722
Content accuracy validation date:
15.11.2024
Content accuracy validation time:
07:25h
On October 18, 2024, the Malaysian Ministry of Finance presented its 2025 Budget speech proposing significant changes to the country's tax system aimed at broadening the tax base and improving revenue collection.
There was no mention of reintroducing the Goods and Services Tax (GST), which had been speculated.
One of the central pillars was the expansion of the Sales and Services Tax (SST) framework, specifically in the areas of the non-essential goods and B2B services.
Starting May 1, 2025, the sales tax will extend to non-essential goods, such as luxury items and discretionary products. This aims to align the tax structure with modern consumption patterns and capture a wider range of economic activities.
The budget also proposes applying service tax to business-to-business (B2B) services, which were previously excluded. This change seeks to close existing loopholes and ensure that taxation reflects all economic interactions, promoting fairness across different sectors.
These adjustments are part of a broader fiscal reform strategy that balances revenue generation with economic growth. The Sales and Services Tax (SST) system, which replaced GST in 2018, consists of a single-stage sales tax on goods and a service tax on specific services. The government aims for these measures to enhance transparency and efficiency in taxation while supporting Malaysia's economic development.
Other news from Other countries
Philippines: New VAT Portal for Non-Resident Digital Service Providers
Public
Other countries
Author: Ljubica Blagojević
Other countries
Author: Ljubica Blagojević
The Philippines has launched its VAT on Digital Services (VDS) portal for non-resident providers to register, file, and pay VAT. Initially, registration was via ORUS due to delays. Under Republic Act No. 12023, the rules cover a wide range of digital services used in the country, even without local presence. Providers must obtain a TIN, open a VDS account, and file quarterly returns. The BIR can a... Read more
China Clarifies VAT Rules for E-commerce and Delivery Services
Public
Other countries
Author: Ljubica Blagojević
Other countries
Author: Ljubica Blagojević
China’s Ministry of Finance and tax authorities have clarified VAT rules for delivery and logistics services amid rapid e-commerce growth. These services fall under transportation and modern services, taxed at 9% VAT (or 3% for small-scale taxpayers), with input VAT deductions allowed. Cross-border deliveries may be zero-rated if proper customs and transport documents are provided. Firms must issu... Read more
China Proposes Major VAT Reforms for 2026, Tightening Compliance
Public
Other countries
Author: Ljubica Blagojević
Other countries
Author: Ljubica Blagojević
On 11 August 2025, China’s Ministry of Finance and the State Administration of Taxation released the draft VAT Implementation Regulations for public comment, ahead of the new VAT Law effective 1 January 2026. Key changes include restrictions on input VAT credits (long-term assets above RMB 5m, non-VAT activities, loan-related costs), shifting annual reconciliation to enterprises, clarified cross-b... Read more
Brazil's New National E-Invoice Standard
Public
Other countries
Author: Ljubica Blagojević
Other countries
Author: Ljubica Blagojević
From January 2026, Brazil will require the national NFS-e (Electronic Service Invoice), replacing varied municipal formats to cut costs and simplify compliance under the Consumption Tax Reform. Municipalities gain better revenue control and transparency but risk losing Union transfers if they fail to adopt. By August 2025, 1,463 had signed on, 291 were issuing NFS-e, and the Federal Revenue Servic... Read more
VAT Late Payment Penalties Overview in the UK
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
Late payment penalties for VAT depend on days overdue, determined by the due date for VAT returns and assessments. The first penalty is 3% of the unpaid amount on day 15, 2% on day 15, and 3% on day 30 if no Time to Pay (TTP) application is made. The second penalty is 10% annual rate on outstanding amount, 4% on day 31. HMRC may assess penalties at intervals, with assessments made 7 days before th... Read more
UAE Adopts PINT AE v1.0.1 as E-Invoicing Standard for 2026 Mandate
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
OpenPeppol has released PINT AE v1.0.1, a revised specification for UAE VAT requirements, focusing on e-invoicing structure and content, with full compliance expected by early 2026. The most recent iteration of the UAE-specific Peppol specification, PINT AE v1.0.1, which covers both billing and self-billing use cases, has been made available by OpenPeppol. In accordance with UAE VAT regulations, t... Read more
Latvia e-Invoicing Mandate Summary
Public
Other countries
Author: Ema Stamenković
Other countries
Author: Ema Stamenković
Latvia mandates Business-to-Government (B2G) e-Invoicing since January 1, 2025, requiring public sector entities to accept and process e-Invoices compliant with the European Standard. A Business-to-Business (B2B) e-Invoicing mandate starts January 1, 2028, requiring Latvian-registered businesses to submit structured e-Invoice data to the State Revenue Service. There is no real-time reporting syste... Read more