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Malaysia Tourism Tax: What You Need to Know in 2024

Updated on: Sep 9th, 2024

9 min read

The Malaysian Tourism Tax Bill was passed in the Senate on 27 April 2017 and the TTx has been in effect since 1 September 2017. All accommodation providers have to collect TTx from tourists staying at their premises. The tax at a rate of MYR10 per room, per night has been required to be collected by the accommodation operator and then paid to the Royal Malaysian Customs Department (RMCD).

The ambit of the law has been significantly widened under the new amendments which were effective from Jan 1, 2023 and now any digital platform whether located in Malaysia or outside Malaysia, on providing services relating to online booking of accommodation in Malaysia shall be liable to be registered for Tourism Tax in Malaysia.

What is the Tourism Tax in Malaysia?

The Tourism Tax in Malaysia, also known as TTx, is a tax charged for all foreign passport holders staying at accommodation premises in Malaysia. It is collected by the operators of these premises and is charged at a fixed rate of RM10.00 per room per night.

Malaysian nationals and permanent residents are excluded from the tax

Who is responsible for collecting and remitting tourism tax in Malaysia?

As per the policy update issued by the Malaysian government, the responsibility for charging, collecting, accounting, and remitting tourism lies on Digital Platform Service Providers (DPSPs) like Agoda and Booking.com for all online bookings, irrespective of whether the DPSP or the hotel operator receives the payment.

The hotel operators are liable to collect and remit TTx only for offline bookings

However, the policy has granted a grace period from 1 April 2023 TO 31 December 2025. During the grace period, the policy eases the compliance burden on DPSPs based on the booking and payment nature. Here's how it works:

If a booking is made online, but payment goes directly to the hotel operator: The responsibility for collecting and remitting TTx falls on the operator.
If both booking and payment are done online through the DPSP: Only, then does the responsibility to collect and remit tourism tax lie with the DPSP.

Who has to pay Tourism Tax?

The tourism tax is a consumption-based tax. Foreign tourists staying at accommodation premises in Malaysia are ultimately liable to bear the burden of Tourism tax in Malaysia.
However, it is collected by the accommodation operation or digital platform service provider (DPSP) and remitted to the government on behalf of the tourist.

How to Pay?

Tourists, upon payment to DPSPs (Digital Platform Service Providers) submit proof of TTx payment. In cases where proof is provided, registered operators are relieved from collecting TTx directly from tourists. However, if tourists fail to provide proof, DPSPs must collect the TTx amount and account for it to the RMCD.
From 2023, DPSPs that facilitate the online booking of accommodations in Malaysia (“online travel platform operators e.g. Airbnb, OYO, etc.”) to collect tourism tax (TTx) and remit the tax to the RMCD.
The deposit of Tourism tax in Malaysia is completely digital using their customer website MyTTx.

Key Highlights:

MyTTx is an online submission and payment system for tourism tax (TTx).
It is available 24 hours daily and accessible anywhere.
The system can be accessed through any latest browser and is best viewed at 1024 x 768 resolution or higher.

When to Pay?

Operators have to file a return every three months to account for the tourism tax (“TTX”) received.

Note: If the operator is GST registered, the operator must file a tourism tax return in the same taxable period in which the operator files his/her GST returns (i.e. monthly or quarterly).
The deadline to make payments of tax is clarified by stating that payment is due “not later than” the last day of the month following the end of each taxable period.

Benefits of Malaysian Tourism Tax

Tourism Tax comes with several advantages that contribute to the sustainable development of the tourism industry and the overall growth of local economy.

Revenue Generation: The primary purpose of the Tourism Tax is to generate revenue for the Government to develop and enhance tourism-related infrastructure and services. This includes the development of tourist attractions, accommodation facilities, transportation networks, and other amenities that enhance the overall visitor experience.
Promotion of Tourism: The funds from the Tourism Tax can be allocated to marketing and promotional activities aimed at attracting more tourists to Malaysia. This helps in boosting the country's image as a desirable tourist destination on a global scale.
Cultural Preservation: Tourism Tax revenue can be invested in projects aimed at preserving and promoting Malaysia's rich cultural heritage. This may involve the restoration of historical sites, supporting traditional arts and crafts, and organizing cultural events that showcase the country's diverse cultural tapestry.
Job Creation: A thriving tourism industry leads to increased demand for services, creating job opportunities across various sectors. The revenue generated from the Tourism Tax indirectly contributes to employment generation, benefiting local communities and individuals.
Balance Over Tourism: The tax is becoming popular as a tool to battle the pressing issue of over-tourism in countries where both, indigenous nature and culture is at risk. It allows the government to monitor and manage the tourism sector effectively, ensuring compliance with standards and regulations set to maintain the industry's integrity.

TTx is here to stay

As Malaysia continues to position itself as a premier tourist destination, the Tourism Tax plays a pivotal role in sustaining its ecosystem. Navigating TTx is a necessity for a primarily tourist driver economy. It needs involvement of all stakeholders DPSPs, tourists, and the RMCD to make the system better and smoother every day.