Output tax

Dear Expert,
Co 1 S/B (Malaysia) issues invoice to Co 2 S/B (Malaysia) for radio survey work carried out on the offshore rig (Singapore flag) but work performed offshore at Terenganu. However, no GST was charged by Co 1 S/B.

Co 2 S/B issues invoice to Co 3 Pte Ltd (Singapore) for the reimbursement of payment made to Co 1 S/B for radio survey and also charged 5% handling fee.

Should Co 2 charge GST to Co 3? 
The reimbursement cost is a supply. As the initial transaction was not charged GST, therefore the reimbursement cost is ZR. The handling fee is an export service to outside Malaysia, therefore ZR.

Is the above treatment correct ?

Asked on February 6, 2018 2018-02-06 07:43:54 Business (商家)
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5 Answer(s)

In that case you put tax code OS (GST @ 0%)

Answered on February 9, 2018. 2018-02-09 07:30:18
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Reimbursement cost is a supply and therefore you have to account for GST @ 6% standard rate.

Answered on February 9, 2018. 2018-02-09 01:01:41
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if the supply is to singapore subsi but related to rig located at terengganu? Tax code SR or ZRE?

Answered on February 9, 2018. 2018-02-09 03:48:48
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Yes, it is a reimbursement to Company 2, right?  Reimbursement cost need to charge GST unlike disbursement.

Let me ask you, why Company 1 has to bill Company 2 and then Company 2 has to bill Company 3 in Singapore? Why can’t Company 1 bill direct to Company 3?  Please clarify this.

Answered on February 9, 2018. 2018-02-09 05:40:02
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Co 3 is the rig owner. Co 2 is the rig operator. Co 2 will incur all the cost first and then recover from the rig owner.

Answered on February 9, 2018. 2018-02-09 06:46:33
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