MALAYSIA Law and Practice Contributed by: Janet Toh, Irene Yong, Krystle Lui and Boo Cheng Xuan, Shearn Delamore & Co.
1.3 Taxation of Digital Advertising Advertising service, including digital advertis - ing, is prescribed as a taxable service, meaning that, 8% service tax is chargeable under the STA upon any advertising service provided in Malay - sia by a registered person in carrying on their business. Similarly, imported advertising services are also subject to the 8% service tax if such services are acquired by any person in Malaysia from any person who is outside Malaysia in B2B trans - actions. The recipient of the imported services must account for and pay the service tax to Cus - toms. The 8% service tax is also applicable where a foreign service provider provides any digital ser - vice to consumers, as explained in 1.2 Digital Economy Taxation . Service tax is not chargeable on advertising ser - vices provided for promotion outside Malaysia or on advertising services provided by a company to any company within the same group of com - panies if the relevant conditions are met. A 10% withholding tax may also apply, as dis - cussed in 1.2 Digital Economy Taxation . How - ever, no withholding tax applies if the advertising services were wholly rendered outside of Malay - sia. 1.4 Consumer Protection The CPA is the key legislation governing con - sumer rights in Malaysia, including those rel - evant to digital goods and services. Although not drafted with online transactions in mind, its scope has expanded to cover online trans - actions, particularly after the introduction of the CPETTR. Key features of the CPA include protections against misleading conduct, false
representations and unfair practices, along with guarantees for acceptable quality, fitness for purpose, and the right to redress. The CPETTR in turn requires the supply of goods and services through websites or online market - places to be accompanied by disclosure of man - datory information such as the full price of the goods or services including transportation costs, taxes and any other cost, and mandates online marketplace operators to maintain records of the sellers and service providers trading on their platform. These provisions ensure comprehen - sive consumer protection in the evolving digital economy. Please note that other laws such as the Sale of Goods Act 1957, Contracts Act 1950, Trade Descriptions Act 2011 and the Price Control and Anti-Profiteering Act 2011 also contain provi - sions that may be relevant to consumer protec - tion within the digital economy. 1.5 The Role of Blockchain in the Digital Economy The Securities Commission Malaysia (SC) is the primary regulator of the digital asset industry in Malaysia and has developed a regulatory frame - work that treats certain digital currencies and digital tokens as securities for the purposes of securities law. The SC has issued the Guide - lines on Digital Assets and Capital Markets and Services (Prescription of Securities) (Digital Cur - rency and Digital Token) Order 2019, which was recently amended by Capital Markets and Ser - vices (Prescription of Securities) (Digital Curren - cy and Digital Token) (Amendment) Order 2025. Any person intending to issue digital assets or operate a platform that hosts such digital curren - cy or digital token will be subject to the approval and registration requirement of the SC.
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