As we get closer to the implementation of digital tax on services from foreign companies, we begin to see more entities disclosing the effect on their products. While Google has already mentioned that the 6% tax does apply to their products, this time around the company has specifically confirmed it for contents in Google Play Store.
According to a newsletter that the company has sent to developers, the new tax will indeed be imposed on Google Play Store contents starting from 1 January 2020. Interesting enough, Google stated that it doesn’t matter even if you are Malaysian developer, the tax will still apply to your product as long as the purchases are made by Malaysian customers.
At the same time, the company also pointed out that it is responsible in charging, collecting, and remitting the digital tax. This means that developers don’t have to calculate the tax, insert it manually into the pricing of their product, or knock the Royal Malaysian Customs Department’s door to ask for more information.
Meanwhile, the same newsletter also pointed out that the digital tax will be applied on Google Play Store’s paid apps and in-app purchases. Hence, if you noticed some price changes for the in-game credit inside your favourite Android games, the digital tax is likely the cause.