Author: arkod_admin

Malaysia is proposing a new tax on online purchases made from overseas retailers that are valued at less than RM500. This tax would add an additional 10% to the cost of the purchase. Starting from April 2023, the Malaysian government will be collecting a new sales tax of 10% on goods imported from overseas that are priced less than RM500. This tax will be added to the cost of the purchase and will be paid by the shopper.

The 10% tax will be imposed on the goods no matter it’s delivered by air, sea or land, including in duty-free islands like Labuan, Langkawi, Tioman and Pangkor, as well as in special areas such as free zones. The new sales tax of 10% on low-valued goods (LVG) will only be applied to items priced less than RM500 that are bought online and imported from overseas to be delivered in Malaysia starting April 1st 2023 onwards. This tax will not be imposed on the delivery charges or insurance costs for the bringing in of the item from overseas to Malaysia.

As per your example, if someone is buying an item from overseas with the price of RM490 and there is a delivery charge of RM10, the total before April will be RM500. After April 1st, the new sales tax will be imposed and the buyer will pay 10% of the item price, which is RM49, in addition to the item price and the delivery fee (RM10), which will make the total cost RM549.

As long as the low-valued goods were purchased online before April 1, 2023, you will not have to pay the 10% LVG sales tax, even if the goods are delivered after April 1. If the invoice date is March 31, 2023 (with payment received), and you receive the goods on April 1 or after April 1, no LVG sales tax is imposed. But if the invoice date (payment received) is April 1, 2023, you will have to pay the LVG sales tax.

These items specifically excluded from the tax are: cigarettes, tobacco products, smoking pipes (including pipe bowls), electronic cigarettes and similar personal electric vaporizing devices, non-nicotine liquid or gel preparations used for smoking via e-cigarettes or vaping devices, intoxicating liquor.

The sellers in Malaysia or sellers outside of Malaysia that sell “low-value goods” (goods priced below RM500) online, and these goods are brought in from overseas into Malaysia, and have total sale value of “low-value goods” brought into Malaysia in 12 months is more than RM500,000 will be required to register with the RMCD.

The registration will open on January 1st, 2023 and can be done through the MyLVG online system using the LVG-01 form. The sales tax on the “low-value goods” will be due and payable at the time when the registered seller sells the goods.

Sellers in Malaysia or sellers outside of Malaysia that sell “low-value goods” (goods priced below RM500) online, and these goods are brought in from overseas into Malaysia, and have total sale value of “low-value goods” brought into Malaysia in 12 months is more than RM500,000 will be required to register with the Royal Malaysian Customs Department (RMCD)

The registration will open on January 1st, 2023 and can be done through the MyLVG online system using the LVG-01 form. The sales tax on the “low-value goods” will be due and payable at the time when the registered seller sells the goods.

Sellers are required to declare the tax amounts and to pay the tax amount collected from online shoppers to the RMCD every three months through the MyLVG system using the LVG-02 form by the last day of the next month after the three-month period. In case of overpaid or erroneous payments, the seller can apply for a refund via the LVG-03 form. Registered sellers can apply to cancel registration if they no longer sell “low-value goods” or if the total sales value of “low-value goods” in the 12 months does not exceed RM500,000.

It’s worth noting that the guide is still a draft, and the information provided is subject to change and the guide could be withdrawn by the publishing of any new guides.

The proposed sales tax on “low-value goods” that are sold online by overseas retailers and delivered to customers in Malaysia is a significant change to the current tax system, and there may be additional clarification needed for the tax to be imposed effectively and fairly. It’s important to note that the Malaysia government is still in the process of finalizing the law, the final details of this law might differ from what is being proposed, so it’s best to consult with a tax professional to know the details of the proposed law and any possible impacts on your business.

Credit to Malay Mail, Ida Lim (2023).

Cargo delays don’t happen often, but if they do, they can be extremely frustrating. Given the recent challenges in global trade, delays can happen and your cargo might depart or arrive later.

When you have booked a shipment, often you want to get it delivered as planned. Your customers rely on you and request your products arrive timely – and they won’t be happy if the products won’t arrive on time or are simply out of stock. At Twill, we are striving for delivering your cargo on time. However, delays can happen, and we know that this can be a huge challenge for many small and medium-sized business owners.

So, why can your cargo get delayed, and how can you prevent your business from potential delays? Read our checklist to find out what might cause delay for your cargo and how you can prepare for it: 

1. The pandemic and the ever-changing customer habits

Since 2020, the Covid-19 pandemic is having a significant effect on shipments and deliveries. As consumer behaviours have changed, they are shifting towards an increase in purchased goods and a decrease in purchased services. With that, many carriers are currently extremely busy transporting goods around the world. Especially trade lanes from Asia to Europe and from Asia to North-America are severely impacted. This is resulting in a lack of equipment and space restrictions on many vessels. While the situation continues, it is essential to follow the latest developments.

2. Extraordinary events and external factors in the shipping world

Some delays might be totally out of your or your logistics partners’ scope – for example, external factors such as the weather, piracy, wars, fire and extraordinary events – which is being described as “force majeure”. Hurricanes, cyclones and many other natural catastrophes can happen, and unfortunately, they can have severe impacts on ocean freight.

Another example is the vessel blockage in the Suez Canal in March 2021. The blockage made it hard to ship cargo smoothly and without any delay. With about 12% of global trade passing through the Suez Canal per year, the trade route provides the shortest sea link between Asia and Europe. And the blockage has exactly stopped this global trade for a week at the end of March. Now, delays are continuing, and on top of that, equipment and space on vessels are lacking.

These factors should play a role when forecasting your supply chain. To prepare yourself, check out the different methods of supply chain forecasting to make it easier for you to prepare for such events.

Ocean freight is the transport of choice for 90% of all global trade, but it comes with risks. Our Value Protect offers a simple source of protection. Learn now how it works.

Traditional marine cargo insurance offers protection for cargo owners against the known risks of transports – but the process of applying it for all shipments can be complicated, time consuming, and expensive. And as a result, 30% of cargo moved by ocean freight is uninsured.

For a small business, those three words are red flags, because your time is valuable, and you might not have the budget to contract insurance for multiple shipments and containers. A single container represents not just a portion (sometimes a big portion) of your inventory; but it is also a key link in a supply chain that begins with you and ends with your customers. And it needs to get to its destination safely and timely.

That’s why Twill, supercharged by Maersk, has introduced Value Protect to the logistics services within our platform. But you may be wondering, what is Value Protect? And why should I use it? Well, let’s take a look in more detail!

You know how important it is to smooth out the entire process from purchase to fulfilment, ensuring a trouble-free delivery. However, there is one shipping stage that can stop you: customs clearance.

In today’s world, products are most likely not made in only one part of the world. Due to globalisation, many products are produced in one part of the world and then shipped to another part where they are sold. This is often referred to as “Made in the World”.

When the product passes through borders, it has to cross different countries and sometimes even the same borders multiple times. This applies to multiple products from various industries such as the automotive and aerospace industry and the pharmaceutical and food sectors. On the way are possible worst-case scenarios for such global supply chains, as Stefan Reinhardt, Area Sales Manager DACH at KGH, explains:

There are multiple worst-case scenarios for a supply chain. There can be delays when goods are stuck in Customs. This can happen because tariff numbers are wrongly selected, or there are formal errors on the documents. Sufficient customs expertise internally or by an external service provider can prevent this.

Stefan Reinhardt, Area Sales Manager DACH at KGH

The last ships stranded by the giant container vessel that was stuck in the Suez Canal have now passed through the waterway, the canal authorities say.

More than 400 vessels were left waiting at either end of the canal when the 400m – long Ever Given became wedged across it on 23 March.