Are You Paying Withholding Tax (WHT) on Your Zoom Subscriptions in Malaysia?

Virtually every corporate setup and SME in Malaysia pays for recurring Zoom Meetings, Zoom Webinars, or Zoom Phone plans monthly or annually.

However, many finance teams treat these credit card charges as routine IT expenses without considering tax compliance: Did you know that subscribing to foreign SaaS platforms like Zoom triggers Malaysian Withholding Tax (WHT) obligations under Lembaga Hasil Dalam Negeri (LHDN)?

With Malaysia enforcing strict MyInvois e-Invoicing requirements and auditing cross-border digital payments, failing to submit WHT on foreign software can result in financial penalties and non-deductible tax expenses. Here is what you need to know about Zoom tax rules, identifying vendor TIN details, and submitting WHT to LHDN.

1. Why Zoom Subscriptions Attract Malaysian Withholding Tax (WHT)

Under LHDN guidelines (specifically Practice Note No. 3/2023 and Section 109 of the Income Tax Act 1967), payments made by Malaysian entities to non-resident companies for standard software-as-a-service (SaaS) applications are classified as royalties.

Key tax implications for Malaysian businesses include:

• Applicable Tax Rate: Payments to non-resident software providers carry a standard 10% Withholding Tax rate.
• Gross-Up Reality: Because Zoom automatically processes subscription payments via credit card or PayPal without deducting 10%, your Malaysian company is responsible for paying the 10% tax out of pocket to LHDN.
• Consequences of Non-Compliance: Failing to remit WHT within 1 month of payment can trigger a 10% late-payment penalty from LHDN and cause the entire Zoom subscription fee to be disallowed as a tax-deductible business expense.

2. Zoom Corporate Entity & Tax Identification Number (TIN) Profile

When entering vendor profiles into your accounting software (such as SQL Account, AutoCount, Xero, or QuickBooks) or issuing self-billed e-Invoices in the LHDN MyInvois portal, you must select the appropriate supplier details.

When paying Zoom Video Communications, Inc. directly, keep these references on file:

• Official Legal Entity: Zoom Video Communications, Inc. (San Jose, California, USA).
• US Foreign Tax ID (EIN): Zoom’s US Federal Employer Identification Number serves as its foreign corporate Tax Identification Number.
• LHDN MyInvois Foreign Supplier Code: When submitting self-billed e-Invoices for non-resident suppliers without a local Malaysian corporate tax number, use the general foreign supplier TIN format recommended by LHDN (e.g., EI00000000020 or EI00000000030).

3. How to Submit Withholding Tax (WHT) for Zoom to LHDN

Submitting WHT on foreign software expenses follows established LHDN e-WHT procedures on the MyTax portal (mytax.hasil.gov.my):

Step 1: Calculate the Withholding Tax Amount

Because Zoom charges the full price without allowing a tax deduction upfront, compute the 10% tax amount based on the total MYR value of your invoice or credit card statement:

Withholding Tax Due = Invoice Amount (in MYR) × 10%

Step 2: Determine Your Submission Cadence

• Standard Monthly Submission (Form CP37): Required for larger enterprise software invoices. Payments must be remitted within 30 days of the transaction.
• Small-Value Deferment (Form CP37S): Under LHDN administrative relief, if the WHT amount on a single transaction is RM500 or less (standard Zoom monthly/yearly packages), you can batch and file these payments bi-annually (by June 30 and December 31).

Step 3: Complete Filing via e-WHT on MyTax

1. Log into your company’s MyTax Account.
2. Navigate to the e-WHT system and select Form CP37 (for Section 109 Royalties).
3. Input the vendor details (Zoom Video Communications, Inc., address, and payment date).
4. Generate the payment slip and remit the tax to LHDN via FPX or online banking.
5. Retain the payment receipt and Form CP37 filing record for at least 7 years for tax audit purposes.

4. Quick Summary: Zoom Tax Data Reference

Tax Parameter	Compliance Requirement
Vendor Name	Zoom Video Communications, Inc.
Primary Country	United States (San Jose, CA)
Malaysia Tax Classification	Section 109 Royalty (SaaS Subscription)
Withholding Tax Rate	10%
Filing Form	Form CP37 / Form CP37S (e-WHT on MyTax)
LHDN e-Invoice Supplier Code	EI00000000020 / EI00000000030