Published in NST on August 15, 2014
THE Real Estate and Housing Developers Association (Rehda) said the impending Goods and Service Tax (GST) will impact the local construction industry, especially on the joint venture (JV) developments between landowners and developers.
Datuk Ng Seing Liong, Rehda’s immediate past president and chairman of Rehda’s task force
on accounting and taxation, said once the GST is implemented, the land owners are expected to start charging six per cent to the developers.
“This six per cent is for construction cost service and landowner is not supposed to be involved in development.
“Now the government wants landowners to charge developers six per cent GST because they claim developers are providing construction service,” he said.
“Developers now pay high land cost to build houses. With the GST, they have to pay additional six per cent to the landowner as they own the land,” Ng said.
Under the current situation, developers will allocate certain units to land owners as part of the venture.
Ng was the speaker for Rehda’s GST roundtable discussion entitled “Impact of GST on Property Industry”. The session was mode-rated by Business Times assistant news editor Sharen Kaur.
Also present were The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) chairman of construction, property and infrastructure committee and deputy secretary-general Tan Sri Teo Chiang Kok and Building Materials Distributors Association of Malaysia (BMDAM) president Yang Kian Lock.
The government will implement GST with a six per cent rate to replace the current sales and services tax, from April 1 next year.
The GST registration turnover threshold will be RM500,000.
In general, the supply of goods and services as well as the importation of goods made within or between designated areas will not be subject to GST.
Ng said, currently, the GST does not consider JV between landowner and property developer to be a JV for GST purposes.
“The JV between landowner and property developer should also be considered as a JV for GST purposes and should be extended to cover joint-venture arrangements involved in real property transactions,” he said.
THE Real Estate and Housing Developers Association (Rehda) said the impending Goods and Service Tax (GST) will impact the local construction industry, especially on the joint venture (JV) developments between landowners and developers.
Datuk Ng Seing Liong, Rehda’s immediate past president and chairman of Rehda’s task force
on accounting and taxation, said once the GST is implemented, the land owners are expected to start charging six per cent to the developers.
“This six per cent is for construction cost service and landowner is not supposed to be involved in development.
“Now the government wants landowners to charge developers six per cent GST because they claim developers are providing construction service,” he said.
“Developers now pay high land cost to build houses. With the GST, they have to pay additional six per cent to the landowner as they own the land,” Ng said.
Under the current situation, developers will allocate certain units to land owners as part of the venture.
Ng was the speaker for Rehda’s GST roundtable discussion entitled “Impact of GST on Property Industry”. The session was mode-rated by Business Times assistant news editor Sharen Kaur.
Also present were The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) chairman of construction, property and infrastructure committee and deputy secretary-general Tan Sri Teo Chiang Kok and Building Materials Distributors Association of Malaysia (BMDAM) president Yang Kian Lock.
The government will implement GST with a six per cent rate to replace the current sales and services tax, from April 1 next year.
The GST registration turnover threshold will be RM500,000.
In general, the supply of goods and services as well as the importation of goods made within or between designated areas will not be subject to GST.
Ng said, currently, the GST does not consider JV between landowner and property developer to be a JV for GST purposes.
“The JV between landowner and property developer should also be considered as a JV for GST purposes and should be extended to cover joint-venture arrangements involved in real property transactions,” he said.
(From left) BMDAM president Yang Kian
Lock, PKMM president Datuk Mokhtar Samad, Rehda taxation and accounting
commitee chairman Datuk Ng Seing Liong, NST Business Times assistant
news editor Sharen Kaur and ACCCIM chairman of construction, property
and infrastructure committee and deputy secretary-general Tan Sri Teo
Chiang Kok at the Rehda GST roundtable discussion in Wisma Rehda, Kuala
Lumpur, yesterday. Pic by Mohamad Shahril Badri Saali
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