Reimbursement vs Disbursement SST Malaysia

Let's clear up your confusion in 3 minutes.

01Definition

02Disbursement:

The claimant as an agent made recovery of payment on behalf of customer.

03Reimbursement:

The claimant as a principal made recovery of an expense to customer.

Remarks: Claimant is SST registered person who pays the expenses on behalf customer.

04Treatment of service tax - Disbursement

• Not subject to service tax.
• Claimant is acting as an agent to customer.
• No additional charges and mark up for the payment.
• Service provider shall bill to customer of claimant.
• Customer is aware of who the service provider is and the actual cost incurred but not claimant.
• Service provider’s bill and claimant’s bill are being issued to customer altogether.

05Treatment of service tax - Reimbursement

• Subject to service tax.
• Claimant is acting as a principal to customer
• Additional charges and mark up for the payment.
• Service provider shall bill to claimant.
• Customer is unaware of who the service provider is and the actual cost incurred.
• Only claimant’s bill is being issued to customer.

06Reference:

Guide on Disbursement and Reimbursement

https://mysst.customs.gov.my/assets/document/Specific%20Guides/Disbursement%20and%20Reimbursement.pdf

07KTP/THK key takeaways

Talk to us if you are still confused after reading SST official guideline.

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