GST Accounting

GST Accounting In Malaysia

After the implementation of GST in Malaysia on 1 April 2015, GST accounting is a must as accounting for business transactions is never the same anymore especially for GST registered companies and businesses. Accountants working in these entities need to work on GST compliance tasks as well in addition to their existing job scope.

For existing companies and businesses, among the additional accounting job scope that they need to pay attention to GST accounting are such as:

  • They have to issue tax invoices which need to follow prescribed particulars as determined by Customs
  • They need to prepare their accounts especially their sales transactions in order to prepare for GST submission every 1 or 3 months, depending on their prescribed threshold
  • Assigning GST codes to related business transactions. It is important to know how to capture business transactions from the perspective of GST rules and regulations in addition to accounting standards, Income Tax Act and Companies Act.
  • Recording purchase and supplier invoices to account for input tax claims
  • GST adjustments through debit and credit notes
  • Keeping proper documentation for potential GST audits. Likewise for income tax compliance, the business and accounting records relevant to GST transactions have to be kept in Malay or English for a period of seven years.

Accounting For GST In Malaysia

Generally, taxable persons such as companies and businesses are required to account for GST based on accrual basis of accounting, basically output tax and input tax are to be accounted for and claimed based on the date when an invoice is issued or received.

A certain groups of taxable person could be exempted from accrual basis and are allowed to use the payment basis of accounting. This arrangement is to accommodate businesses who carry out their business activities mainly on cash payment basis. Examples of businesses mainly on cash payment basis include restaurants, parking vendors and retailers.

Accounting for GST needs not be a headache for you. At Syafiq Hairul & Associates, we provide accounting services that can assist you with your GST accounting needs. To know more, please contact us today.