© Copyright 2015 SW Project Consulting Sdn Bhd

Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
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For medical expenses, it shall involve using
the following five tax codes, generally:
1.
2.
3.
4.
5.
EP – Exempt Purchase
NR – Not Registered Businesses
BL – Block Medical Expenses
ZP – Zero Rated Medication
OP – Out of Scope by Government
Hospital
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The following figure shows that businesses
are usually assigning EP – Exempt Purchase
or NR – Not Registered for clinic medical
expenses. Actually, there are facts to support
on when we use the correct tax code (EP or
NR) for the clinic medical fee. You may read
the summary below.
Even though it is not an offence or serious
wrong doing by using different tax code for
medical expenses, I would rather follow the
facts stated in the Act, regulations, guidelines
and DG’s decisions to assign proper tax code
for medical expenses.
on
I observe that many businesses and
organizations use different tax codes for
medical expenses due to their nature for GST
purpose.
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Introduction
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Tax Code Assignment for Medical Expenses
© SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Summary of Tax Code Assignment for Medical Expenses
General Tax Code Matrix for Different Medical Establishments
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Tax Invoice or Simplified Tax Invoice tC
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Tax invoice, Simplified Tax Invoice & Invoice BL EP BL BL EP BL ZP on
Pharmacy Sdn Bhd Herbal Shop Sdn Bhd Traditional Medicine Practitioners (GST Registered) 




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
Cash bill, receipt, invoice g
Medical Sdn Bhd or Bhd Private Hospitals Document lti
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Clinic Government Hospitals Herbal Shop Sdn Bhd Traditional Medicine Practitioners (Not GST Registered) Clinic Sdn Bhd Tax Code  EP  OP  NR su
Type of Healthcare Businesses Page 2
Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Summary of Tax Code Assignment for Medical Expenses
Document Medical clinic which provides mixed supplies and incorporated Medical establishments which provide medical and other services Other services such as registration fee, administration fee and non‐medical related service fee Invoice and 1;2;4;6;7;
Tax Invoice 8;10 & 12 Any businesses Bh
NR Pr
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op
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OP ht
EP oj
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BL g
ZP FOMEMA (Foreign Workers Medical Examination Monitoring Agency ) by Unitab Medic Sdn. Bhd. (312291‐
X) FOMEMA Web Qualitas Medical Group Sdn Bhd (449628‐P) or medical groups
Pantai Hospitals Sdn Bhd (466313‐V) or private hospitals Other private healthcare establishments which are incorporated and GST registrants XYZ Pharmacy Sdn Bhd Medicine from pharmacy which is standard rated Clinic ABC Clinic provides medical services Clinic is not required to register for GST Private hospitals  Provides medical services  Sells medicine to its own patient and staff Government hospitals  Provides medical services  Sells medicine to anyone Private pharmacy  National Essential Medicine Reference d
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Tax Type of Healthcare Businesses Code Clinic XYZ Sdn Bhd ©
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TX General insurance company  Traditional Medicine Practitioners  Herbal Shop, Acupuncture, orthopaedics and etc  Any medical businesses not liable to register  Foreign workers’ compensation scheme © SW Project Consulting Sdn Bhd 2016
Tax Invoice or STI Cash bill, receipt, invoice 1;2;3;5;9 Cash bill, receipt Tax Invoice or STI Invoice, cash bill, receipt 13 Tax Invoice 11 Page 3
10 4 Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
SupportingReferences
Referencesfor
forTax
TaxCode
CodeAssignment
Assignmentfor
– Medical
Supporting
MedicalExpenses
Expenses
Reference 1: Definition of healthcare Services on
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GST Exempt Order Gazette 2014 Paragraph 18
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Reference 2: Definition of exempt supply yr
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DG Decision Item 2 – 3/2015
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Guide on Healthcare Services [03112015] © SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
Reference 3: Non Registration of a person who make wholly exempt lti
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supplies Guide on Registration [13012016]
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Reference 4: Registration of a person who make taxable supplies
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Guide on Registration [13012016]
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Reference 5: Non Registration of a private healthcare facility ©
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Guide on Healthcare Services [03112015]
© SW Project Consulting Sdn Bhd 2016
Page 5
Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
Reference 6: Registration of a private healthcare facility which is mixed supplier on
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Guide on Healthcare Services [03112015]
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Reference 7: Registration Fee, Administration Fee, Pr
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Examination Fee and Miscellaneous Fee and Charges are subject to GST ©
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Guide on Healthcare Services [03112015]
© SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
Reference 8: Medicine from Pharmacy is Block Q3 Reference 9: Medicine from hospital and private healthcare Bh
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establishment through prescription is exempted – Q4 ©
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Guide on Healthcare Services [03112015] © SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
Reference 10: Medicine from Pharmacy is Zero Rated if it is National Essential Medicine List
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GST Zero Rated Order Gazette 2014 & Amendments in 2015 © SW Project Consulting Sdn Bhd 2016
Page 8
Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
Reference 11: Disallowance of Input Tax Credit on Insurance and Takaful Contracts ©
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Guide on Input Tax Credit [29122015]
© SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
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Regulation 36, GST Act 2014 © SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Supporting References for Tax Code Assignment for Medical Expenses
Reference 12: Disallowance of Input Tax Credit on Medical Expenses on
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Guide on Input Tax Credit [29122015] Regulation 36, GST Act 2014 (f) tC
Reference 13: Medical Treatment by Government Hospitals oj
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is Out of Scope ©
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Guide on Healthcare Services [03112015]
© SW Project Consulting Sdn Bhd 2016
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Author: Stanley K Wong | [email protected]
Title: Tax Code Assignment for Medical Expenses | Published: 12/02/2016
Other GST Impacts
GST-03 Submission
GST Accounting
The following accounting code may need to
keep the records:
OP
ZP
NR
orthopaedics & etc)
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GST Compliance
As the Act, regulation, guidelines and DG’s
decision mentioned about the proper
classification of medical supplies, I would
comply with those facts for GST tax code
assignment purpose.
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*It is part of obligation under Section 26(2)
Workmen’s Compensation Act 1952
**If the traditional medicine practitioner is
GST registrant, then it is BL
Proper Records Keeping
Even though it is not a wrong doing by
assigning other tax code to medical expenses,
I emphasize on the maintenance of
accounting records is necessary to be
accurate.
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 Block input tax
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BL
Chart of Accounts
Medical Fee; Medical Expenses
Hospitalization Surgical Accident
Insurance & Takaful Scheme
Medicine (Pharmacy)
Staff and Foreign Workers’
Benefits
GST Block
Foreign Workers’ Expense Foreign
Worker Compensation Scheme*
Medical Fee; Medicine Expenses
(Private Clinic)
Medical Fee; Medicine Expenses
(Government Hospitals)
Medical Expenses (NEM)
Medical Expenses (Traditional
medicine practitioners**)
Medical Expenses (Acupuncture;
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Tax Code
Businesses need not to disclose adjustments
in 6a – Standard Rated Acquisition 6b – Input
Tax:
 Medical expenses value
Upcoming Event
You may be interested in the following event:
Preparation for GST Audit
Avenue Business Centre Phileo Damansara 1
February 26, 9:30 A.M. ~ 5:30 P.M.
Training Fee: RM689.00 Inclusive 6% GST
Please contact Stanley Wong for registration at
Tel: 603-27247183 Mobile: 012-3052908
©
Disclaimer:
This Article has been prepared by Stanley Wong, SW Project Consulting Sdn Bhd (SWPC).
This Article is meant solely for use by its readers and is not for physical circulation in public. This Article
constitutes a personal view and interpretation on tax code assignment for medical expenses that is given
under GST Act 2014 in Malaysia. This Article is based on information that we consider reliable, opinions
expressed are our current opinions as of the date appearing on this Article. While all efforts have been taken
to check the accuracy of the information provided herein, we do not warrant that is free from any technical
inaccuracies or typographical errors. Stanley Wong and SW Project Consulting Sdn Bhd shall not be liable for
damages of any kind arising out of or in connection with the use of the information in this Article.
© SW Project Consulting Sdn Bhd 2016
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