Introduction
The new Sales Tax Bill governing the SST (Sales and Service Tax) was officially cleared by Dewan Negara on Aug 20, 2018. SST will replace GST and is expected to be fully implemented by September 1, 2018.
Just in case you aren't sure about what SST is all about, we prepared a quick blog post about the 7 Things Malaysian Business Owners Need To Know About SST.
As a StoreHubber, we understand that there might be a lot of confusion and came up with a quick SST guide to help your business be SST-compliant.. so just read on!
Note: Please use a computer/laptop for the following steps.
- Are you required to charge SST?
- Decide on a pricing strategy
- Add SST ID to your BackOffice
- Remove Service Tax from Service Charge (*if applicable)
- Update Tax Name on Receipt Field
- Update your StoreHub iPad POS apps
1. Do you need to charge SST?
Not sure if you're SST eligible? Check out our blog post here SST FAQs and scroll right to point 3.
But a quick summary:
- Are you a manufacturer?
- Yes? You will be charged sales tax by customs if your annual revenue exceeds RM500,000
- No? You won't be charged sales tax
- Are you a service provider?
- Yes?
- Is your annual revenue for your taxable services greater than RM500,000 (or RM1.5M for F&B businesses)? Yes. You have to charge your consumers a service tax (which is payable to Customs).
- Is your annual revenue for your taxable services less than RM500,000 (or RM1.5M for F&B businesses)? No. You won't have to collect service tax.
- No? You won't have to collect (or pay) service tax.
- Yes?
For more info, go check out our blogpost right here.
Not all businesses are required to charge SST, so let's begin by narrowing down your SST eligibility and what to do next.
A) No, my business IS NOT eligible for Service Tax
If your business was previously eligible for GST, but no longer eligible for SST, you'll have to remove GST tax codes from your BackOffice.
How do you do that?
Step 1. Login to your BackOffice. Go to your Settings > Tax.
Delete your GST Tax Code.
Step 2. Go to the BackOffice > Products > Manage Products.
Step 3. Then click Export to CSV.
Step 4. Open your CSV file on your computer (you'll need Excel or an equivalent for this) and delete everything in the Tax Name column of your CSV file.
Step 5. Save as > CSV
Step 6. Import your CSV again to replace your old price list in your CSV.
Go to the BackOffice > Products > Manage Products. Then click Import CSV.
And you're done! đ
Now you can proceed to ignore the rest of this support article... unless you really want to read it.đ¤
B) Yes, my business IS eligible for Service Tax
If your business IS eligible for Service Tax, the rest of this support article is incredibly relevant to you. It's a fairly straightforward process (albeit slightly tedious), but we've got the step by step directions for you right here:
First, update your tax codes.
Step 1. Log in to your BackOffice.
Step 2. You need to add a new tax code.
Go to your BackOffice > Settings > Tax.
Step 2. Add a new tax code and name it exactly as 'service tax', and add the 6 to the tax rate. Then click Save.
Remember, this field is case sensitive so you will need to input this exactly as "service tax".
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Now onto your products. You will have to tag the relevant taxable products with a 'service tax' tag. Not all products in your Product List might be taxable.
Example:
If you run a coffee shop and sell food, beverages and packaged coffee beans, only your food and beverage products would be taxable and you would need to charge a 6% Service Tax on those products. Your packaged coffee beans, however, would not be taxable and you should not be charging the 6% Service Tax on the sale of those products.
The most straightforward way to tag all taxable products would be to do it on your computer on your product CSV file.
Step 3. Go to the BackOffice > Products > Manage Products.
Step 4. Then click Export to CSV.
Step 4. Open your CSV file on your computer (you'll need Excel or an equivalent for this).
Step 6. Look for the "Tax Name" column
Step 7. For products that are eligible for Service Tax, fill in "Service Tax" in the Tax Name column. Remember to fill in those words exactly.
For businesses in the F&B industry, please make sure all your food & beverage products are tagged with "service tax" in the Tax Name column. But remember to clear the field for any retail products.
For businesses in the service industry, only tag services that are taxable with "service tax" in the Tax Name column. But remember to clear the field for any retail products.
Run through your entire list, make sure all the products that need to be taxed are tagged accordingly. If everything looks good....
Step 5. Save as > CSV. For now.
But it doesn't stop there. For the products / services that you have now tagged as taxable, you will have to make a decision on how you want to price these products or services so
DO NOT UPLOAD / IMPORT THIS CSV INTO YOUR BACKOFFICE YET
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2. Make a decision on pricing strategy
At this point, you'll have to decide on how you want to price your products / services for your customers... and you have 2 options
A) I want to add SST on top of my current product prices
If you choose to add SST on top of your current product prices, here's what you need to do.
But before you proceed, make sure you've completed the steps for B) Yes, my business is eligible for Service Tax.
If you haven't, scroll back up and follow the steps.
If you have... you're only left with a few more steps.
Step 6. Import your updated CSV to update your product price list with the new tax code.
WARNING: Do this only on 31 August 2018 AFTER you close your shift otherwise you risk implementing SST before Sept 1, 2018 which is subject to possible penalties.
After you've imported your CSV and updated your price list, proceed to the last step!
B) I want to absorb SST and maintain my current prices.
If you want to retain your current prices and absorb SST costs, you will have to then reduce your tax exclusive pricing by 6%.
Example:
A customer orders a glass of Milo Ais, priced at RM5.
Upon payment, 6% Service Tax needs to be added to be bill. As such he will have to pay you RM5.30.
If you prefer to absorb the Service Tax costs, and you will have to adjust the price of your Milo Ais to RM4.70.
Upon payment, 6% Service Tax will be added to the bill. As such he will have to pay you RM5, therefore maintaining your current prices.
In order to reduce your tax exclusive pricing by 6%, you will need to get friendly with your Exported CSV list and Excel (or any equivalent spreadsheet software).
If you aren't familiar with Excel, Open Office or Numbers we've prepared a Google Sheets template for you to download and edit to help simplify your price update process. You can go here for the step-by-step information on how to do so. (Caveat: You will need a Google Account for this).
However, if you are cool with Excel, Open Office or Numbers, you can read on.
Now that you've exported a CSV file of your entire product list and added the relevant tax codes to the Tax Name column, you can start modifying your price list.
Step 1.Open the CSV file of your exported product list.
IMPORTANT: Do not change any part of the file except the price and tax!
Step 2. Locate the Price column. The prices listed here are the tax-exclusive prices of your items.
Step 3. Adjust your price to the lower tax-exclusive price.
A simple formula - your Service Tax rate is 6%. Divide the current price by 1.06 for all the relevant items.
Step 3. Save as > CSV.
Step 4. Update your BackOffice with your new price list
WARNING: Do this only on August 31, 2018 AFTER you close your last shift for the day, and BEFORE you open your first shift on September 1, 2018.
Go back to BackOffice > Products > Manage Products > Import CSV > import the file you just created.
3. Add your SST ID to the BackOffice
Now, we've come to the last few steps of the day. You first need to add your new SST ID to the BackOffice
Step 1. Go to your BackOffice > Settings > Stores > Choose your store >
You will see a new field called SST ID and key in your SST ID. Save.
Do not edit or change your existing GST ID.
Step 2. Click Save.
Step 3. Repeat for all the affected Stores in your business.
4. Make sure you're not collecting any Service Tax on your Service Charge
If you do charge Service Charge, make sure you are not collecting any additional tax on top of your Service Tax.
Step 1. Go to BackOffice > Settings > Account > Scroll down to Service Charge
Step 2. For the Service Charge Tax field, select None.
5. Update the Tax Name on Receipt Field
Finally, you can change the Tax Name on Receipt to reflect the official change from GST to SST compliance.
Step 1: Go to your BackOffice > Settings > Receipt Templates > Choose your usual Receipt Template
Step 2. Rename Tax Name on Receipt from GST to SST.
Step 3. Save.
6. Update your StoreHub iPad Apps
The updated StoreHub POS apps will be released on August 31st. You will be alerted via inapp message and via email when they're ready to be downloaded from the App Store and you can proceed to update all your iPads.
THAT'S IT!!
Note: Once the SST Submission Report format is finalised, StoreHub will make this available so you can export it from your BackOffice in time for November 2018.
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