GoDaddy Withholding Tax Malaysia: WHT Guide 2024

If your Malaysian business pays for domain registration, web hosting, or any digital service under the GoDaddy brand, you are making a payment to GODADDY OPERATING COMPANY, LLC — a foreign entity incorporated in the United States. What most business owners do not realise is that this seemingly routine subscription payment carries a significant Malaysian tax compliance obligation: Withholding Tax (WHT) under the Income Tax Act 1967.

Failure to understand and comply with this obligation can result in full expense disallowance, financial penalties, and unwanted scrutiny from Lembaga Hasil Dalam Negeri (LHDN). This guide breaks down everything you need to know — from the legal basis and gross-up mechanics to DTA relief and e-WHT filing procedures.

Section 1: The Legal Basis — Why GoDaddy Payments Are Classified as Software Royalties

Under Section 2 of the Income Tax Act 1967, “royalty” is broadly defined to include payments made for the use of, or the right to use, any software, patent, design, trade secret, or similar intellectual property. When a Malaysian business subscribes to GoDaddy services — whether domain registration, website hosting, email hosting, SSL certificates, or website builder tools — the business is essentially licensing the right to use proprietary technology and infrastructure owned by GODADDY OPERATING COMPANY, LLC.

LHDN’s position, reinforced by Practice Note No. 3/2023, is clear: payments to foreign digital service providers for the use of software, platforms, and technology-based services are deemed royalty income derived from Malaysia. This triggers withholding tax obligations under Section 109 of the Income Tax Act 1967.

Key Triggers for WHT Classification:

Payment is made to a non-resident foreign entity (GODADDY OPERATING COMPANY, LLC is a US-registered LLC)
The service involves licensing access to proprietary software, platforms, or digital infrastructure
The income is derived from Malaysia — meaning the payer is a Malaysian tax resident or entity
No permanent establishment (PE) exists in Malaysia for the foreign entity

This is not a grey area. LHDN has consistently applied this classification to foreign SaaS, hosting, and domain platforms. GoDaddy services fall squarely within this definition.

Section 2: The Gross-Up Reality — Why You Owe Tax on Top of What You Already Paid

Here is where many Malaysian businesses make a costly mistake. When you pay GoDaddy via credit card, GODADDY OPERATING COMPANY, LLC charges you 100% of the invoice amount — they do not deduct any Malaysian withholding tax. The platform has no mechanism to facilitate this deduction on your behalf.

Under Malaysian tax law, the burden of withholding and remitting the tax falls entirely on the Malaysian payer. Because the gross amount was already paid to the foreign vendor without any deduction, you are now required to perform a tax gross-up calculation.

How the Gross-Up Works:

Item	Amount (MYR)
Invoice paid to GoDaddy	RM 500.00
WHT Rate (standard, no DTA)	10%
Gross-Up Formula: RM 500 ÷ (1 – 0.10)	RM 555.56
WHT Amount to Remit to LHDN	RM 55.56
Total Cost to Your Business	RM 555.56

In plain terms: your actual cost is higher than your invoice. The WHT is an additional out-of-pocket expense your business must bear. If you process hundreds or thousands of ringgit in GoDaddy payments annually, this gross-up liability adds up significantly — and ignoring it creates compounding risk.

Section 3: Section 39(1)(f) Risks — The Hidden Cost of Non-Compliance

Many businesses assume that because GoDaddy payments are small or automated, they can fly under the radar. This assumption is dangerous. Section 39(1)(f) of the Income Tax Act 1967 explicitly disallows any deduction for expenses where the required withholding tax has not been paid to LHDN.

What This Means in Practice:

100% expense disallowance: Every ringgit you paid to GoDaddy becomes a non-deductible expense, increasing your taxable income
10% late payment penalty: Under Section 107C and related provisions, LHDN imposes a 10% penalty on unpaid WHT amounts
Back-year assessments: LHDN can assess unpaid WHT retrospectively, potentially covering multiple financial years
Audit exposure: Digital payment trails to foreign platforms are increasingly flagged during tax audits

The financial consequence of non-compliance is therefore double-sided: you lose the tax deduction on the expense and you still owe the WHT plus penalties. Proactive compliance is always the less costly path.

Section 4: Double Taxation Agreement (DTA) Relief — Can You Pay Less Than 10%?

GODADDY OPERATING COMPANY, LLC is a United States-incorporated entity. Malaysia and the United States do not currently have a comprehensive Double Taxation Agreement (DTA) in force for corporate income purposes. This means the standard domestic WHT rate of 10% applies without any treaty reduction available for US-sourced entities under this structure.

However, there are important nuances to consider:

Key DTA Considerations:

If the payment is routed through or invoiced by a GoDaddy-related entity in a DTA-treaty country (such as Ireland or Singapore), a reduced WHT rate may apply — but only with a valid Certificate of Residence (COR) issued by the tax authority of that treaty country
Without a COR, LHDN will not grant DTA relief, and the standard 10% rate applies automatically
COR documents must be obtained, verified, and retained as supporting documentation for every year the reduced rate is claimed
Practice Note No. 3/2023 requires that the foreign entity’s Tax Identification Number (TIN) be accurately declared on WHT forms

Verifying which legal entity issues your GoDaddy invoice — and which jurisdiction it falls under — is therefore a critical compliance step before you file.

Section 5: Filing Guide — Form CP37 vs Form CP37S for GoDaddy Payments

Once you have established your WHT liability, the next step is correct filing via LHDN’s e-WHT portal. There are two key forms, and choosing the correct one matters.

Form CP37 — Standard Withholding Tax Return

Used for individual, one-off, or large payments to non-resident foreign entities
Must be submitted and payment remitted within 1 month after the date of payment to the foreign vendor
Requires the foreign entity’s TIN, country of residence, and nature of payment

Form CP37S — Simplified Bi-Annual Filing

Designed for small, recurring, low-value payments — ideal for monthly GoDaddy subscriptions
Filing deadlines: 31 July (covering January–June payments) and 31 January (covering July–December payments)
Allows businesses to accumulate recurring WHT liabilities and file twice yearly instead of monthly
Significantly reduces administrative burden for businesses with multiple foreign SaaS subscriptions

Step-by-Step e-WHT Filing Process:

Log in to MyTax portal (mytax.hasil.gov.my) with your company’s credentials
Navigate to e-WHT under the “e-Filing” section
Select Form CP37 or CP37S as applicable
Enter the foreign payee’s details: entity name (GODADDY OPERATING COMPANY, LLC), country of tax residence, and verified TIN
Input the gross payment amount and apply the applicable WHT rate (10% standard or DTA-reduced rate with COR)
Submit and remit payment to LHDN via FPX or GIRO
Retain all supporting documents: invoices, payment records, COR (if applicable), and TIN verification

Section 6: Get Verified TIN Numbers & COR Documents — Stop Guessing, Start Complying

⚠️ Do Not File Blindly — You Need the Right TIN & COR

Filing Form CP37 or CP37S without the correct foreign Tax Identification Number (TIN) for GODADDY OPERATING COMPANY, LLC is incomplete and risks LHDN rejection or audit. Similarly, claiming DTA relief without a valid Certificate of Residence (COR) is a compliance red flag.

Important Notice: We do not publish specific TIN numbers or Tax Registration IDs on this blog. All verified foreign TIN profiles and Tax Residence Certificates (COR) for GODADDY OPERATING COMPANY, LLC and hundreds of other foreign digital vendors are available exclusively through our compiled compliance database.

📦 What You Get in the Kode Digital WHT Database:

✅ Verified foreign TIN numbers for major digital platforms including GoDaddy
✅ Tax Residence Certificates (COR) for DTA-eligible entities
✅ Country of residence classification per LHDN requirements
✅ CP37 / CP37S filing-ready vendor profiles
✅ Regular updates aligned with Practice Note No. 3/2023

🔐 Get the Full WHT TIN Database & COR Downloads Now

Trusted by Malaysian accountants, tax agents, and finance teams. Instant digital download. LHDN-compliant documentation.

Final Thoughts: GoDaddy Payments Are Not Tax-Free — Act Before LHDN Does

GoDaddy is one of the world’s most widely used domain and hosting platforms, but its widespread adoption does not exempt Malaysian businesses from withholding tax obligations. Payments to GODADDY OPERATING COMPANY, LLC are legally classified as software royalties, subject to 10% WHT under Section 109, and must be filed via e-WHT using Form CP37 or CP37S.

The cost of compliance is predictable. The cost of non-compliance — disallowed expenses, back-assessments, and LHDN penalties — is not. Protect your business, complete your filings correctly, and ensure you have the right TIN and COR documentation before your next filing deadline.

This article is prepared for informational purposes and does not constitute formal tax advice. Consult a licensed Malaysian tax agent or chartered accountant for advice specific to your business circumstances.