GST System Changes Newsletter
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- Written by Stanley K Wong
- Category: GST System Changes Articles
Tripartite Arrangement in accommodation that involves local hotel, overseas booking agent and local consumer. Payment is received by overseas agent from local consumer.As such, local consumer does not entitle for input tax credit as there is no tax invoice issued from overseas booking agent. It will give a hotel voucher to check-in. At the same time, local hotel will not issue tax invoice to local consumer as the payment is made to overseas agent.
In the tripartite arrangement, there must be a binding agreement between overseas booking agent and local hotel. Local hotel will issue tax invoice to overseas booking agent as the place of supply is in Malaysia. Local hotel receives payment including all taxes from overseas booking agent since the local consumer paid in full.
Under this arrangement with local GST consumer, local hotel and overseas booking agent, no input tax credit is cited. Local hotel has to pay output tax.
Please read the document for other hotel booking scenario related to tripartite arrangement in hotel booking.