The world today is a global village. As such, the movement of people, animals, and goods across borders has become very common. Whenever these items are moved from one country to another, they are subject to customs duty and tax. The Royal Malaysian Customs Department is responsible for collecting customs duties and taxes in Malaysia
What is Customs Duty?
Customs duty is a tariff or tax on goods transported across international borders. The purpose of customs duty is to protect each country’s economy, residents, jobs, environment, etc., by controlling the flow of incredibly restrictive and prohibited goods into and out of the country.
What is Tax?
Tax is a mandatory financial charge or any levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization to fund various public expenditures as explained in https://www.dhl.com/discover/en-my/faq/customs-duties-taxes/customs. In Malaysia, the Customs Department collects taxes on imported goods.
How Are Customs Duties and Taxes Calculated?
Customs duties and taxes are usually calculated as a percentage of the value of the goods being imported. The value of the goods is usually determined by the seller and includes the cost of the goods, shipping and insurance costs, and any other associated costs.
What Are the Types of Customs Duties and Taxes in Malaysia?
Malaysia has two types of customs duty and taxes: import duty and sales tax.
Import Duty: Import duty is a tax on goods imported into Malaysia. The amount of import duty payable depends on the type of imported goods and the country of origin.
Sales Tax: Sales tax is a tax imposed on the sale of goods in Malaysia. The sales tax rate varies depending on the type of goods sold.
What Are the Exceptions to Customs Duty and Tax in Malaysia?
There are a few exceptions to customs duty and tax in Malaysia. These include:
- Goods imported by the Malaysian government for official use.
- Goods imported by diplomatic missions and international organizations accredited to Malaysia.
- Goods imported by Malaysian companies for use in manufacturing other goods that will be exported.
- Goods imported for personal use, such as gifts and souvenirs.
- Samples of goods imported for promotional purposes.
What Are the Penalties for Not Paying Customs Duty and Tax in Malaysia?
The penalties for not paying customs duty and tax in Malaysia can be severe. They include:
- Fines of up to three times the value of imported goods.
- Imprisonment of up to two years.
- Confiscation of the imported goods.
What Are the Procedures for Paying Customs Duty and Tax in Malaysia?
The procedures for paying customs duty and tax in Malaysia are as follows:
- The importer must declare the imported goods to the Customs Department.
- The importer must pay the customs duty and tax on the imported goods.
- The Customs Department will issue a receipt for customs duty and tax payment.
- The importer must present the receipt to the Malaysian Customs Department upon exiting the country.
What Are the Documents Required for Paying Customs Duty and Tax in Malaysia?
The documents required for paying customs duty and tax in Malaysia are as follows:
1. A valid passport.
2. The original commercial invoice for the goods being imported.
3. The original bill of lading or air waybill.
4. The Customs Declaration Form (K2).
5. The import permit, if required.
6. The packing list.
7. The Certificate of Origin, if required.
8. The Malaysia Entry Visa, if required.
9. The Malaysian Customs Receipt (K4).
10. The exit permit, if required.
Customs duty and tax are necessary charges the Malaysian government imposes on imported goods. These charges are used to protect the Malaysian economy and residents and fund public expenditures. Importers need to be aware of the types of customs duty and tax they may be required to pay, as well as the exceptions and penalties for not paying. Importers should also be familiar with Malaysia’s procedures and documents required for paying customs duty and tax.