Rates of Sales tax: - 5% - Fruits, certain foodstuff, timber and building material. - 10% - General rate on other taxable goods - 5% - Cigarettes - 5% - Liquor and alcoholic drinks Payment of sales tax - Sales tax imposed should be paid within 28 days from the expiration of the taxable period. - The tax collected is payable to Royal Custom and Excise Department. 2) Excise duty Definition Excise duty is basically a type of government tax which is mainly meant for the producers and the retailers or manufacturers on specific goods. The manufacturers are considered as the entities who solely manufacture goods by themselves. And 4
entities who majorly outsource manufacturing as well as other processes related to it. The manufacturing process always comes under their name in this. For covering such extra costs, manufacturers deliberately ad up the cost of goods sold which is COGS, which stats the buyer into paying more for these costs which is induced by the manufacturer. In that sense, it becomes an indirect tax. Type of goods subject to excise duty - Liquor. - Cigarettes, tobacco and tobacco products. - Motor Vehicles. - Playing cards (Playing Cards). - Mahjong tiles. Due of federal excise taxes Manufacturers must file Form 720 quarterly, one month after the end of the quarter: - Quarter-end March - file by April 30 - Quarter-end June - July 31 - Quarter-end Sept. - Oct 31 - Quarter-end December - January 31 If the due date is a weekend or holiday, the form is due the next business day. The e-file Form 720 can be using through the IRS EFTPS system or send it in by mail. 3) Custom duty Custom duty is a tax levied on imports by the customs authorities of a country to raise state revenue, or to protect domestic industries from more efficient competitors from abroad. 5
In Malaysia, all goods dutiable on import are put through customs duty according to Customs Duty Order, 1996. Types of duty: - Import duty - Sales duty - Export duty 4) Stamp duty Stamp duty is a tax levied on a variety of written instruments specifies in the First Schedule of Stamp Duty Act 1949. In general term, stamp duty will be imposed to legal, commercial and financial instruments. There are two types of Stamp Duty namely ad valorem duty and fixed duty. For the ad valorem duty, the amount payable will vary depending on type and value of the instruments. An instrument is required to be stamped within 30 days of its execution if executed within Malaysia. If the instrument is executed outside Malaysia, it must be stamped within 30 days after it has been first received in Malaysia. Examples of Instruments Subjected to Stamp Duty - Real Properties Transfer - Share Transfer - Business Transfer 6
- Rental or Lease - Security Penalty of stamp duty - If the instrument is not stamped within the period stipulated, a penalty of. RM25.00 or 5% of the deficient duty, whichever is the greater, if stamped within 3 months after the time for stamping; - RM50.00 or 10% of the deficient duty, whichever is the greater, if stamped after 3 months but not later than 6 months after the time for stamping; - RM100.00 or 20% of the deficient duty, whichever is the greater, if stamped after 6 months from the time for stamping may be imposed.
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