Malaysia Tourism Tax, Thailand Land Windfall Levy, and Philippines Excise Tax – ASEAN Regulatory Brief

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Malaysia: Tourism tax comes into effect from August 1

Malaysia’s customs department has announced that with effect from August 1, foreign visitors as well as domestic tourists will have to pay a tourism tax to operators of different types of accommodation. The tax, which has to be paid regardless of business or leisure travel, has been fixed at RM20 (US$5) for five-star hotels, RM10 (US$2.5) for four-star, RM5 (US$1.25) for three-star, and RM2.5 (US$0.62) for non-rated accommodation.

Accommodations such as traditional kampong stays and homestays as well as premises with less than 10 rooms are exempted from the new tax. The tourism tax will be levied over and above the goods and services tax and service charges.

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Thailand: Land windfall tax likely by year-end

Thailand’s Fiscal Policy Office (FPO) is planning to draft a bill in the coming months to introduce a land windfall tax on landowners who benefit from the increased value of their land from infrastructure development projects such as high-speed train stations and expressways. While the exact details of the proposed tax are yet to be drafted, FPO has proposed that it be capped at 5 percent of the inflated value of the land.

In addition, the land windfall tax will be a one-time tax to be imposed at the time of the transfer of property. Those liable for the proposed tax will be owners of land within a 2-3 km radius of infrastructure projects. The FPO has now invited comments from the public before drafting the proposed bill.

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Philippines: Excise Tax on sugar-sweetened beverages in the offing

The Philippines’ House of Representatives have passed the government’s proposed tax reform package, which among others, plans to introduce an excise tax on sugar-sweetened beverages. The proposed tax has been fixed at P10 (US$0.20) and will be imposed on several sugar-sweetened beverages, including sweetened juice drinks, sweetened tea and coffee, carbonated beverages with added sugar, including those with caloric and non-caloric sweeteners, flavoured water, energy drinks, sports drinks, powdered drinks, cereal and grain beverages, and other non-alcoholic beverages that contain added sugar.

Plain milk and milk drinks without added sugar, infant formula and milk alternatives such as soy milk, almond milk, and flavoured milk; one hundred percent fruit and natural vegetable juices; and meal replacements and medically indicated beverages will be exempted from the proposed levy. The proposed tax reform package is now awaiting approval from the Senate.

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Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.

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