Frequently Asked Questions (FAQ) on GST

Transcription

1 Frequently Asked Questions (FAQ) on GST Contents General What is GST? When will GST be implemented? How will I know if I will be charged GST? What is the rate of GST? Will I be charged GST on any CIMB products purchased? How does GST work? Where can I obtain more info about the GST mechanism in Malaysia? Is CIMB a GST registered person? What are the GST treatments for fees and charges imposed by CIMB? Are fines or penalties subject to GST? Will CIMB issue tax invoice? What is a valid tax invoice? I am a GST registrant. How do I request a tax invoice from CIMB? Will I be charged for requesting for a tax invoice? Will GST be charged on any fees incurred for MEPS transactions to foreign parties? Are ATM card annual fees subject to GST? Can the Bank waive the GST chargeable to me? Are Islamic products subject to GST? Is stamp duty subject to GST? Businesses in Free Trade Zones are exempted from Service Tax. Are there similar conventions for GST?... 6 Deposit Will I be charged for making a deposit into or withdrawal from my Deposits Account (e.g. Current Account, Savings Account and Fixed Deposits)?... 6 Financing Will I be charged with GST on the monthly financing installment payment?... 6 Credit Cards After the implementation of GST, what will happen to the RM50 service tax on credit cards? Will I be charged GST for every credit card transaction I make? Are late payment charges subject to GST? Are finance charges (monthly interest/profit) subject to GST? The Bank also issued me a tax invoice. Why do I need one? I have received two separate invoices from different entities. Usually, I receive a single invoice for all transactions from the Bank. Why am I now being sent multiple invoices?... 8 Wealth Management Once GST is implemented, will my insurance premium be inclusive of GST?... 8 Page 1 of 13

2 29. Will the current Sales & Service Tax be charged on my insurance premium after GST implementation? Where can I get more information about GST for the insurance products or investment products which I have purchased via CIMB Bank? What are the fees incurred for unit trusts and Private Retirement Scheme (PRS) that are subject to GST? Does GST apply to income distribution from unit trust funds? Does GST impact Reverse Repurchase Agreement (RR)/Bond investments? Does GST impact Gold Investment Account (GIA) investments?... 9 Corporate Customers I currently receive a single invoice for multiple trade confirmations. Moving forward, will I continue to receive a single invoice for multiple trade confirmations? I received two separate invoices from different entities. Usually, I receive a single invoice for all transactions from the bank. Why am I now being sent multiple invoices? We currently receive a single invoice which contains multiple contract notes. What happens when one of the contract notes were to be voided? Are placement fees subject to GST? Current Account and Online Banking Facility BizChannel@CIMB Are the fees and charges for Current Account and BizChannel@CIMB subject to GST? Do I receive Tax Invoice for each transaction performed via Current Account and BizChannel@CIMB? How do I receive Tax Invoice for Current Account and BizChannel@CIMB? How do I receive my Bank Statement for my Current Account? Can I view the GST charges in Bank Statement? Trade Finance How is GST charged for trade finance products and services? Are charges on trade financing subject to GST? Why is the existing Credit Advice renamed to Tax Invoice? What is it for? Why is the existing Debit Advice renamed to Credit Note? Why have you changed it and what is it for? Agents and Brokers Are commissions paid to agents subject to GST? I am an agent and I receive a commission from CIMB. Who is responsible for issuing the tax invoice? Page 2 of 13

3 General 1. What is GST? Goods and Services Tax (GST) is a multi-stage broad-based consumption tax based on the value-added concept. 2. When will GST be implemented? GST will be implemented nation-wide from 1 April 2015 onwards. 3. How will I know if I will be charged GST? Generally, GST will be charged on fees and charges for products offered by the Bank. Where GST is charged, the GST amount will be disclosed separately in the tax invoice. 4. What is the rate of GST? 6%. 5. Will I be charged GST on any CIMB products purchased? Financial services are generally classified as exempt supplies where no GST will be imposed on interest charged by the Bank. However, fee, service charge, commission, or other similar charges imposed by the Bank will be subject to 6% GST. 6. How does GST work? In Malaysia, the person who is registered under the Goods and Services Tax Act 2014 is known as a registered person. A registered person is required to charge GST (output tax) on his taxable supply of goods and services made to his customers. He is allowed to claim input tax credit on any GST incurred (input tax) on his purchases which are inputs to his business. Thus, this mechanism would avoid double taxation and only value added at each stage is taxed. Page 3 of 13

4 7. Where can I obtain more info about the GST mechanism in Malaysia? Please refer to the official website of the Royal Malaysian Customs Department (RMCD) at for more GST-related information, legislation and guidelines. 8. Is CIMB a GST registered person? Yes, CIMB Bank Berhad, CIMB Islamic Bank Berhad and CIMB Investment Bank Berhad are GST registered persons with the following GST registration number as below: No. Entities GST Registration No. 1. CIMB Bank Berhad CIMB Islamic Bank Berhad CIMB Investment Bank Berhad What are the GST treatments for fees and charges imposed by CIMB? The 3 main types of GST treatment are as follows: Standard Rated supply ( SR ) and is taxable at 6%, Zero-rated supply ( ZR ) and is taxable at 0%, and Exempt supply ( ES ) is a non-taxable supply. 9. Are fines or penalties subject to GST? Fines and penalties that are punitive in nature are not subject to GST i.e. out of scope. 10. Will CIMB issue tax invoice? Yes, CIMB will issue a valid tax invoice for all standard rated supplies. Page 4 of 13

5 11. What is a valid tax invoice? A valid tax invoice acts as a supporting document for GST registrants to claim GST amount from RMCD. The valid tax invoice is issued in the name of the individual or business customer and it contains information required under the GST Regulation. 12. I am a GST registrant. How do I request a tax invoice from CIMB? CIMB will issue a valid tax invoice on taxable supplies on transactional or monthly basis. Please visit our nearest branch or call for further information. 13. Will I be charged for requesting for a tax invoice? You will not be charged for requesting for a tax invoice. The same applies for reprints. 14. Will GST be charged on any fees incurred for MEPS transactions to foreign parties? As the service is consumed in Malaysia, MEPS transaction fees to foreign parties will be subject to GST. For example, a foreigner who is a customer with a foreign bank comes into a CIMB branch in Kuala Lumpur to make cash withdrawal at the SST (Self-Service Terminal), the foreigner will be charged a fee for using the SST with a foreign bank card. That fee imposed to the foreigner will be subject to 6% GST. 15. Are ATM card annual fees subject to GST? ATM card annual fee is subject to GST at 6%. 16. Can the Bank waive the GST chargeable to me? Under the GST Act 2014, the Bank is required to collect GST, on behalf of RMCD, on fees and charges imposed. Page 5 of 13

6 17. Are Islamic products subject to GST? Profit charged by the Bank on financing is not subject to GST. Fees/charges for Islamic products are subject to GST at 6%. 18. Is stamp duty subject to GST? Stamp duty is not subject to GST. 19. Businesses in Free Trade Zones are exempted from Service Tax. Are there similar conventions for GST? Yes. Under the GST regime, GST does not apply to businesses registered in the Designated Areas which are Labuan, Langkawi and Tioman. Deposit 20. Will I be charged for making a deposit into or withdrawal from my Deposit Account (e.g. Current Account, Savings Account and Fixed Deposits)? No, you will not be charged with GST for depositing into or withdrawing from your Deposits Account. However, if there are any fees or charges associated with the depositing into or withdrawing from your account, GST will be imposed at 6% on the fee/charges. Financing 21. Will I be charged with GST on the monthly financing installment payment? No, you will not be charged with GST on your monthly financing installment payment. Page 6 of 13

7 Credit Cards 22. After the implementation of GST, what will happen to the RM50 service tax on credit cards? Beginning 1 April 2015, the RM50 service tax will be abolished. From 1 April 2015 onwards, fees charged on credit cards such as cash withdrawal or annual fee will be subject to GST. 23. Will I be charged GST for every credit card transaction I make? There will not be any fees and GST imposed by the Bank on any payments or purchases made using the Bank s credit card, other than those charges (e.g. cash withdrawal fee, etc.) listed in the credit card terms & conditions. However, the merchant or retailer may charge you GST on the goods and services you purchase from the merchant or retailer. 24. Are late payment charges subject to GST? Late payment charges are not subject to GST as they are punitive in nature. 25. Are finance charges (monthly interest/profit) subject to GST? Finance charges (monthly interest/profit) are exempted from GST. 26. The Bank also issued me a tax invoice. Why do I need one? After the GST implementation on 1 April 2015, the Bank will issue a valid tax invoice for all standard rated supplies. A valid tax invoice acts as a supporting document for GST registered person to claim the GST amount from RMCD. The tax invoice is issued by the Bank in the name of the GST registered person and contains the information required under the GST regulations. Page 7 of 13

8 27. I have received two separate invoices from different entities. Usually, I receive a single invoice for all transactions from the Bank. Why am I now being sent multiple invoices? Due to the requirements under the GST Act, invoices will now act as Tax Invoices. As such, the legal entities which provide the taxable services will be required to issue you a valid tax invoice. Wealth Management 28. Once GST is implemented, will my insurance premium be inclusive of GST? Life Insurance is exempted from GST. However, PA insurance, medical & health and critical illness insurance without death benefits are subject to GST including other fees and charges (e.g. policy service charge, partial withdrawal and cost of insurance on non life rider for investment linked products). For General Insurance: all products are subject to 6%. (Standard rated) For Credit Related Products (for example, MRTA/ MRTT): not subject to GST (Exempted). 29. Will the current Sales & Service Tax be charged on my insurance premium after GST implementation? No. With effective 1 April 2015, Sales & Service Tax will be replaced by GST Tax. 30. Where can I get more information about GST for the insurance products or investment products which I have purchased via CIMB Bank? Please refer to the respective insurer or Relationship Manager or Personal Financial Consultant at our branch for product-related information. For general information, please refer to the RMCD GST official website at Page 8 of 13

9 31. What are the fees incurred for unit trusts and Private Retirement Scheme (PRS) that are subject to GST? Unit Trusts PRS Application fee/sales charge Application fee/sales charge Management fee (charged at fund level) Switching fee (if any) Transfer fee Management fee (charged at fund level) Transfer fee (if any) Account opening fee Exit fee (if the fee is for a service) PPA account opening fee PPA transfer fee PPA pre-retirement withdrawal fee PPA administration fee (charged at fund level) 32. Does GST apply to income distribution from unit trust funds? No. Income distribution from unit trust funds is not subject to GST. 33. Does GST impact Reverse Repurchase Agreement (RR)/Bond investments? 6% GST will be charged on transaction fees for RR/Bond investments. Transaction fees are charged on each receipt of coupons credited into the customer s Foreign Currency Account, and amounts to SGD/AUD/USD/GBP (respective to the Bonds currency). For fees/charges denominated in foreign currency, GST is imposed on the ringgit equivalent of the fees/charges using the prevailing selling rate of exchange on the transaction date. 34. Does GST impact Gold Investment Account (GIA) investments? 6% GST will be charged on all processing fees including transport and insurance fees for the physical request of gold, transport and insurance fees for the sale of physical gold upon failure of the investor to collect within the stipulated time. The penalty fee for not maintaining the minimum balance in GIA account is out of scope of GST. Page 9 of 13

10 Corporate Customers 35. I currently receive a single invoice for multiple trade confirmations. Moving forward, will I continue to receive a single invoice for multiple trade confirmations? Due to requirements under the GST Act, invoices will now act as Tax Invoices. As such, Tax Invoices are required to be issued by the respective legal entities. Where the trade confirmations are delivered by the same entity, then a single Tax Invoice will still be issued. However, if the trades are served by multiple entities, then separate Tax Invoices will be provided from the respective entities. 36. I received two separate invoices from different entities. Usually, I receive a single invoice for all transactions from the bank. Why am I now being sent multiple invoices? Due to requirements under the GST Act, invoices will now act as Tax Invoices. As such, the legal entities which provide the taxable service will be required to issue you a valid Tax Invoice. 37. We currently receive a single invoice which contains multiple contract notes. What happens when one of the contract notes were to be voided? Post 1 April 2015, there will still be a single invoice issued for multiple contract notes. If one of the contract notes turns void, a credit note will be issued to void/cancel the contract note in reference to the original invoice. 38. Are placement fees subject to GST? Placement fees are subject to GST. Page 10 of 13

11 Current Account and Online Banking Facility 39. Are the fees and charges for Current Account and subject to GST? Yes. All the transactions with fees and charges are subject to GST. 40. Do I receive Tax Invoice for each transaction performed via Current Account and BizChannel@CIMB? Yes. Tax Invoice is issued on monthly basis and available inbizchannel@cimb for each account level but not by transaction level. 41. How do I receive Tax Invoice for Current Account and BizChannel@CIMB? For Current Account tagged under BizChannel@CIMB: Tax Invoice is available for download in BizChannel@CIMB on the 3 rd calendar day of the following month. For Current Account NOT tagged under BizChannel@CIMB: Tax Invoice will be sent to you on the 10 th calendar day of the following month via mail. 42. How do I receive my Bank Statement for my Current Account? As per current practice, Bank Statement will be sent out to you on the 10 th calendar day of the following month via mail. 43. Can I view the GST charges in Bank Statement? Yes. There is a separate line to indicate the GST charged for each transaction shown in the Bank Statement. Page 11 of 13

12 Trade Finance 44. How is GST charged for trade finance products and services? All fees and commission charged for trade finance products and services will be subject to 6% GST unless it is exempted/subject to zero-rated under the relevant gazette orders. 45. Are charges on trade financing subject to GST? Interests charged on financing are exempted. However, interest charged trade financing for the purpose of export are subject to GST at zero-rated. 46. Why is the existing Credit Advice renamed to Tax Invoice? What is it for? The Credit Advice is one of the existing documents that have been renamed as a Tax Invoice. Under the GST Act, any supplies made by a GST registered person must be supported by a valid tax invoice. Furthermore, if you are a GST registered person, the Credit Advice document will serve as a supporting document for your input tax credit claim. 47. Why is the existing Debit Advice renamed to Credit Note? Why have you changed it and what is it for? A Credit Note is issued to the customer when the amount previously invoiced is reduced for the same supply. In the content of the credit note it will reflect the adjustment made to the fees/charges and the corresponding GST amount. Agents and Brokers 48. Are commissions paid to agents subject to GST? Commissions paid to agents will be subject to GST if the agent is a GST registered person. Page 12 of 13

13 49. I am an agent and I receive a commission from CIMB. Who is responsible for issuing the tax invoice? Under the GST regime, it is the responsibility of the income earner i.e. agents/brokers to issue a tax invoice for commission received from CIMB if the agents/brokers is a GST registered person. Page 13 of 13