Tourism tax. EY Tax Alert. I. Date of coming into operation II. Tourism Tax Regulations 2017

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1 Special Edition August Issue 05 EY Tax Alert Tourism tax I. Date of coming into operation II. Tourism Tax Regulations 2017 Gazette Order regarding the effective date of coming into operation of the Tourism Tax Act 2017 [Act 791] The Second Minister of Finance has determined the following dates for the commencement of specific Parts or Sections of the Tourism Tax Act 2017 [Act 791]. 1 August 2017 is the date on which the following Parts of the Tourism Tax Act 2017 come into operation: Part I Preliminary Part II - Administration Part III (Sections 8 and 9 only) Rate of tourism tax and Power of Minister to exempt Part IV - Registration Part X - Miscellaneous

2 1 September 2017 is the date on which the following Parts of the Tourism Tax Act 2017 come into operation: Part III (Sections 6 and 7 only) Imposition of tourism tax and Duty of operator to collect tourism tax and pay tourism tax collected to Director General Part V Invoices, Records, Returns and Assessment Part VI Remission, Refund and Recovery Part VII - Enforcement Part VIII Offences and Penalties Part IX Trials and proceedings EYTC commentary: Rate of tourism tax Further clarification of the Order published in the Gazette is pending. Media has recently shared the news that a flat rate of RM10 per room per night will apply. Exemptions It will be challenging for some potential operators of accommodation premises not currently registered as tourist accommodation premises under Section 31C of Tourism Industry Act 1992 if required - to register on time as it has yet to be formally announced in the Gazette which operator or class of operators will be exempted from registering or collecting tourism tax. Furthermore, it has been announced in various media sources that Malaysians will be exempted from the payment of tourism tax. Publication of the Gazette is therefore highly anticipated. Registration deadlines Registration (Sections 10, 11, and 12 of the Tourism Tax Act) has an effective date of 1 August Our reading of Section 10 is that new operators must apply for registration within 30 days from the date the operator begins operations of the accommodation premises. Under Section 11, operators operating accommodation premises before the commencement of the Act are required by 31 August 2017 ( 30 days from the date of coming into operation of Part IV of the Act) to apply to the DG to be registered. Notwithstanding Sections 10 and 11, the DG has the power to register any new operator who is not registered and any operator who operates accommodation premises whether or not registered as tourist accommodation premises under Section 31C of the Tourism Industry Act Further information is expected imminently on these and other matters. 2 EY Tax Alert 7 August 2017 Special Edition

3 Key information regarding the Tourism Tax Regulations 2017 The Tourism Tax Regulations 2017 [P.U. (A) 228] were gazetted and came into operation on 1 August Registration Under the Regulations, an operator who applies to be registered under Section 10 or 11 of the Tourism Tax Act 2017 ( the Act ) shall apply using Form TTx-01 which is to be submitted to the Director General ( DG ) of Customs by electronic means. Upon approval, the DG will assign a specific tourism tax identification number and issue a certificate of registration (Form TTx-02). This certificate is to be displayed in a conspicuous place at the accommodation premises. Any operator who fails to display the certificate commits an offence and shall be liable to a fine or imprisonment or to both. In addition to the above, the operator of such premises is obliged to notify the senior officer of Customs in writing if there are changes to the operator s particulars, as listed below: (a) Name of his business; (b) Address of any place of his business; (c) Status of his business; (d) Rating of his accommodation premises; or (e) Number of rooms in his accommodation premises 2. Returns and payments In accordance with Section 19 of the Act, the operator shall account for the tourism tax received in a return (Form TTx-03) and furnish this return by post or electronically not later than the last day of the month following the end of the operator s taxable period to which the return relates. The return shall be deemed to be furnished: (a) In the case of delivery by post, on the date of the post mark; or (b) In the case of delivery by electronic service, when such return has been received by the DG through the electronic service The payment of the tourism tax, penalties, surcharges, or any other money shall be made by cheque, bank draft or electronic banking. Any operator eligible for a claim of refund, shall make such claims using Form TTx-04. The application for such refunds must be made to the DG within one year from the date the remission is granted and must be supported by evidence as required by the DG. 3 EY Tax Alert 7 August 2017 Special Edition

4 Claims for refund for bad debt may be submitted using Form TTx-04, within three (3) years from the date the payment for the accommodation is written-off. In the event of errors in any return furnished under the Act, the operator must correct such errors in the prescribed manner and within such time as the officer of Customs may require. 3. Credit note and debit note A credit note or debit note shall be issued by the operator if there is a change in the amount of tourism tax due to: (a) A change in the rate of tourism tax in force under Section 8 of the Act; (b) Any adjustment in the course of his business; or (c) An error in charging the tourism tax rate The credit note or debit note must contain nine (9) particulars as stated in subparagraph 6(5) of the regulations. 4. Electronic service Subject to Section 62 of the Act and Part VI of the Regulations, the DG may provide an electronic service to any registered user for the filing or furnishing of any application, return, declaration or any other document; and the service of any notice, direction, order, permit, receipt or any other document. 5. Administration The locations of the tourism tax offices are provided in the First Schedule of the Regulations. The relevant office hours and hours of payment are set out in Regulation EY Tax Alert 7 August 2017 Special Edition

5 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com Ernst & Young Tax Consultants Sdn. Bhd. All Rights Reserved. APAC no ED None. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com