Goods and Services Tax Act 2014

Transcription

1 Goods and Services Tax Act 2014 Please be informed that Citibank Berhad is a GST-registered person with GST registration number , and therefore our fees and charges for all applicable products and services will be subjected to GST effective 1 April For full list of fees and charges where GST is applicable, visit Frequently Asked Questions (FAQs) 1. What is GST? Goods and Services Tax (GST) is a multi-stage broad-based consumption tax based on the value-added concept. 2. What do you mean by value-added concept? We understand that to mean that payment of tax is made in stages by the intermediaries in the production and distribution process. Although the tax would be paid throughout the production and distribution chain, only the value added at each stage is taxed, thus avoiding double taxation. 3. When will the GST be implemented in Malaysia? GST will be implemented nationwide from 1 April What is the rate of GST? At present, the GST rate is 6%. 5. What are standard rated, zero rated and exempt supplies? In the context of commercial banking, supplies would be commercial banking products and services. We have taken the liberty to extract from Royal Malaysian Customs (RMC) s GST Guide on Commercial Banking (revised as at 4 January 2014) as follows:- Standard rated supplies are taxable supplies of goods and services that are subject to standard rate GST of 6%. A supply is standard rated if there is a basic charge or a fixed fee being imposed on the supply. Fee based services are standard rated supplies. Examples of fee based services are loan processing, rental services and safe keeping or custodial services. Zero rated supplies are taxable supplies that are subject to zero rate. Commercial banking services rendered for customers abroad will be zero-rated if he is outside Malaysia at the time the services are rendered. Similarly, any commercial banking service rendered in connection with land and goods situated outside Malaysia is also zero rated. Exempt supplies are non-taxable supplies. A supply is exempt if the consideration is in the form of an interest or spread. These supplies would include, but are not limited to, the provision of loans, credit or advances, exchange of currency or traveller s cheques and the trading of financial options or futures contract.

2 6. Are services and products offered by Citibank subject to GST? It depends on the type of products and services offered. For full list of fees and charges where GST is applicable, visit 7. Will I be charged GST for the interest received from the bank for my fixed deposits, savings and/or current accounts? No. Interest paid by commercial banks to banking customers as a result of deposit taking through various types of accounts (savings, current, fixed deposit or similar accounts) will not be subject to GST. However, the fees and charges imposed for services provided in relation to the operation of these accounts, such as electronic funds transfer, encashment, provision on bank statements are subject to GST. 8. Are loans, hire purchase or other financing facilities subject to GST? You will not be charged with GST on the drawdown of the loan and the payment of the monthly loan instalment payments or interest on the loan. However, service charges and fees related to the loan such as documentation fee, loan application fee, redemption statement request fee and/or processing fees are subject to GST. 9. Will I be charged with GST for transmitting or remitting money? The transmitting of money or remittances will not be subject to GST. However, the commission levied for the issuance of a cashier s order or a demand draft and teletransmission charges will attract GST. 10. Are there GST charges for the issuance of cheques? The issuance of a cheque by a drawer for payment is not subject to GST. However, the cheque processing fee will be subject to GST. In addition, the cost of the cheque book (excluding stamp duty) and the service fee for encashment of the cheque over the counter will attract GST. 11. Will I still need to pay the RM50 service tax on my credit card after 1 April 2015? No. Beginning 1 April 2015, the service tax will be abolished. Instead, the annual subscription fee charged for a credit card will be subject to GST. GST is also payable with respect to card fees if any for debit and charge cards. 12. I have already paid the credit card service tax of RM50 before 1 st April, will I still be charged GST on my annual fee billed on/after 1 st April? No, GST will not be charged on your annual fee if you have already paid the credit card service tax which covers 1 year from your anniversary date. GST will only be charged on the annual fee on the next anniversary date of your credit card. 13. Are late payments or late charges subject to GST? No, fees and charges being imposed to compensate for loss, damages or in cases where the customer fails to meet certain requirements or conditions are not subject to GST. 14. If I make the same type of e-payment transactions several times, how would GST be charged? GST if applicable will be charged based on per transaction basis and each transaction attracts GST as soon as a fee or charge is levied at the end of each transaction. This is in the main because on-line payments occur at the end of each transaction regardless of the number of transactions effected. There is no aggregation as such nor a total bill so to say.

3 For example:- 10 IBG transactions x [RM (RM0.10 X 6%)] = 10 transactions X RM0.11 (GST inclusive rounded up from RM0.106 to the nearest 1 sen to RM0.11) = RM If I make a withdrawal from the ATM of another bank where I do not maintain an account, would GST be imposed on the amount I withdraw? No, the GST is only charged on the MEPS interbank fee and not on the amount you withdraw. Further, there is no GST imposed for withdrawals made from ATMs of the bank where you maintain an account with unless the bank imposes a fee or charge for withdrawals in excess of a prescribed number a month. 17. Will I receive a tax invoice for fees and charges that are subjected to GST? Yes, Citi will issue a tax invoice that complies with the GST Act 2014 Section 33 for all our fees and charges that are subjected to GST. 18. Why do I need a tax invoice? A valid tax invoice is needed by a GST registered person as a supporting document to claim back input tax credits from the Royal Malaysian Customs. 19. If the Bank waive the fees that are GST rated due to meeting their criteria, will I still be billed GST on the waived fees? No, GST is not charged on any fee or charges that are waived. 20. Will my investment transactions be subject to GST? No, the purchase and sale of any investment vehicles (including FX, Dual Currency Account, Market Linked Investments, Unit Trust, Private Retirement Scheme and Retail Bonds) are not subject to GST. However the service fees such as sales charge and other related fees and charges will be subjected to GST. The gains and dividends resulting from your investments are also not subject to GST. For example: For an investment amount of RM100,000, the sales charge of 5% (RM5000) will incur an additional GST of RM300. Hence, the total payable amount would be RM105, I am being charged for a service in a currency other than Malaysian Ringgit. Will I be subject to GST? Yes, GST will still be charged regardless of whether the transaction is conducted in Malaysian Ringgit or any other currency. As part of the new tax invoice requirements, the Malaysian Ringgit equivalent of the charge will be shown in the tax invoice. 22. Will there be any refund of the RM50 and/or RM25 credit card service tax that I paid earlier if this is abolished from 1 st April 2015? No, the credit card service tax that you paid is for the following 12 months period from your credit card anniversary date and is non-refundable. 23. My mortgage loan application is submitted and/or approved before 1 April 2015 and accepted before or after 1 April Will the account set-up fee for my new Mortgage loan be subjected to GST The account set-up fee and other one-time fees related to your loan account will be subjected to GST if the account is opened in the system after 1 April 2015 even if the loan is accepted before 1 April You will not be charged GST on the account set-up fees if the account is opened in the system before 1 April 2015.

4 24. For my Overdraft loan account, is there any GST on commitment fees that are charged on the unutilized portion of the overdraft? No, commitment fees are not subjected to GST. 25. Will there be any GST charged for legal and related disbursement fees on new loan application/ existing loan with top-up/ conversion/ line increase? Yes, the fee and GST amount will be charged directly by a third party to you. Citi only acts as the payment agent. 26. How will the GST charges be displayed on my monthly statements? You can refer to the images below for examples of the monthly bank and credit card statements with GST charges. Bank statement with GST charges on transactions: Bank statement with summary of GST charges:

5 Credit card statement with GST charges on transactions: Credit card statement with summary of GST charges: 13 March V2.0 Citibank Berhad (Company No M)