In line with the announcement made by the Malaysian government regarding the Tourism Tax, I will talk about a series of questions that are commonly asked by hotel owners or operators, thus helping all of you to find the answers that are related to it.
1. What is a Tourism Tax?
Tourism Tax (TTx) is referred to as a tax charged for all foreign passport holders at accommodations premises collected by the operators effective from 1st September 2017 in Malaysia. It is charged at a fixed rate of RM10.00 per room per night.
However, during the Covid-19 pandemic, The Malaysian Government has announced the exemption of the Tourism Tax for all foreign passport holders for hotel stays between 1st March 2020 and 31st December 2021 then further extends to 31st December 2022.
Now, the Malaysian government has announced that the Tourism Tax will resume back starting from 1st January 2023.
2. How is the RM10 per room per night applied?
Assuming one room is booked for one night by John (who is a Filipino), the TTx charged to John will be RM10.00 x 1 room x 1 night = RM10.00
In the 2nd Scenario, assuming two rooms were booked by Dianne (who is an Indonesian) for three nights, so the TTx charged to Dianne will be RM10.00 x 2 rooms x 3 nights = RM60.00
3. How is this new to the travel industry starting January 2023?
Since September 2017, a guest who is a foreigner is subject to paying Tourism Tax when staying at any “accommodation premises” in Malaysia; this tax is collected by the operator at the accommodation premises upon check-in, regardless if the booking was made online or walk-in.
However, starting from 1st January 2023. For any bookings made through digital platforms that provide reservation services such as booking.com, Agoda, and Expedia, the platform is the one to collect the Tourism Tax directly from the foreign guests when the guest made the booking and payment online through the platform. The digital platform provider shall remit the tax collected to the RMCD.
Whereas, for booking that was made online through the platform but payment only upon arrival at the accommodation premises, the TTx shall be collected by the accommodation operator upon guest arrival. The responsibility of remitting the tax collected for this booking shall be by the accommodation operator instead.
UPDATE!
We have just received the update that currently, only AGODA will collect the TTx directly from the guest together with the room charges if they made the payment online. Whereas, for other OTAs like Expedia, Booking.com & Traveloka, the TTx will be collected upon check-in by the property operator, UNTIL FURTHER NOTICE.
4. What if the booking has been made before 1st January 2023 for the check-in date after on or 1st January 2023?
If a foreign traveller has made a booking on a digital platform before 1st January 2023, for check-in on or after 1st of January 2023, the Tourism Tax must be collected by the accommodation operator upon guest arrival and the accommodation operator is required to remit the tax to the RMCD.
5. What if my property did not register for TTx?
We advise you to further consult with your business advisor or check with RMCD if you have not registered as a Tourism Tax registrant. Generally, if you are operating accommodation premises of 5 rooms or more, you are liable to be registered.
You may also check this website https://www.myttx.customs.gov.my/ to further understand the registration.
6. If a Malaysian with his foreign friend both check into the same room and the booking was made and paid by the Malaysian, is TTx chargeable?
In this case, it is not subject to Tourism Tax because a local stayed and paid for the stay. However, the Tourism Tax is chargeable in the event that the foreigner stays and pays for the stay.
7. If the reservation has been made with full payment together with the TTx for the booking made via OTAs, then the guest request for the cancellation on a non-refundable policy, will the TTx will be refunded?
Unfortunately, we are unsure of this. Do let us know in the comment section if you have more information regarding this. What I can say is, you may refer to the T&C directly from the OTAs.
8. Will TTx subject to SST too?
No. The operator is not allowed to charge SST on the Tourism Tax.
9. Is day use chargeable to TTx?
No, if the day use charge is not equal to the room rate per night.
10. Is a Digital Platform provider compulsory to collect private data such as passport no. or ID no. to ensure nationality?
Yes. The Digital Platform provider should make an appropriate adjustment in its system to capture the information that is to identify the citizenship of the tourists.
11. John makes an accommodation booking online and provides inaccurate information which resulted in TTx not being collected. Who will be responsible?
If due diligence has been done to obtain the information required from the tourists, the Digital Platform provider will not be responsible for any inaccurate information provided by the tourist, which may result in the under-collection of TTx.
Check out this video where we answer a frequently asked question regarding the Tourism Tax
Conclusion
That’s all 11 common questions that we heard so far regarding the Malaysia Tourism Tax. Please share this article if you find it useful and drop any questions in the comment sections if you think there are more questions that should be answered.
