With accordance of the new Service Tax (Amendment) 2019 Bill which imposes a 6% tax on digital services, we’re about to see some slightly higher prices for most of the services we use online. The Bill passed in April this year, and will be implemented starting from January 2020.
With that, Google has now announced that a 6% tax will be charged to users once the law comes into effect.
“We always comply with the tax laws in every country we operate in, and we continue doing so as tax laws evolve. To be in compliance with Malaysia’s new Sales & Services Tax, we will charge a 6% Services Tax to our clients in the country, starting from January 1, 2020, once the law comes into effect,” a Google spokesperson said in a statement to The Star.
According to The Star, the Google spokesperson confirmed that the tax will apply to the company’s G Suite services which are emails, cloud storage, and other applications related to business and companies. The tax will apparently be charged on user purchases and will show up in the “Billing & Payments” section of Google accounts.
The spokesperson however did not disclose whether the new tax will be affecting online purchases like on the Google Play Store or YouTube Premium. Rather Malaysian users are asked to wait for further announcement and that they’ll be alerted via email for any changes in pricing.
But I’m going to assume that it will be affected considering that the 6% tax is applicable to digital services such as software, applications, video games, digital music and film, online streaming services, and subscription-based media, etc. So services like Netflix, Spotify, and Steam will also be affected by the Digital Tax, but there haven’t been any official announcments as of yet.