Why You Need to Pay Withholding Tax (WHT) on Zoom, Google Meet & Teams in Malaysia
Virtual communication tools like Zoom, Google Meet, and Microsoft Teams are critical everyday software assets for modern businesses in Malaysia. However, when paying for these monthly subscriptions or annual enterprise plans, many finance teams and business owners miss a major local compliance duty: Malaysian Withholding Tax (WHT).
The fundamental legal, regulatory, and technical reasons your company must remit Withholding Tax to Lembaga Hasil Dalam Negeri (LHDN) for these video conferencing platforms are detailed below, along with guidance on sourcing vendor Tax Identification Numbers (TINs).
1. Why Video Conferencing SaaS Triggers Withholding Tax
Under Section 109 of the Income Tax Act 1967 (ITA 1967) and LHDN’s Practice Note No. 3/2023, payments made by Malaysian entities to non-resident companies for cloud software, digital subscriptions, and platform access rights are legally classified as software royalties.
- License to Use Software: Paying for Zoom, Google Meet (via Google Workspace), or Microsoft Teams grants your company a commercial license to access proprietary software and communication algorithms hosted on foreign servers.
- Irrevocable Classification: LHDN treats software-as-a-service (SaaS) access as a taxable royalty payment regardless of whether the provider operates from the US, Singapore, or Ireland.
- Absorbed Costs (Gross-Up): Foreign vendors do not deduct Malaysian tax at their payment gateways. As a result, your Malaysian company must compute the statutory 10% Withholding Tax and pay it directly to LHDN out of pocket.
2. The Risk of Skipping WHT Compliance
Failing to remit Withholding Tax for your corporate communication software carries severe consequences during an LHDN corporate tax audit:
- 100% Disallowed Business Expense: Under Section 39(1)(f) of the ITA 1967, any foreign expense subject to WHT that has not been remitted to LHDN is completely rejected as a deductible operational expense.
- Automatic 10% Late Penalties: LHDN imposes an immediate 10% penalty on any overdue tax liability.
3. Vendor Legal Entities & Tax Identifiers
When preparing self-billed e-Invoices or completing LHDN Form CP37 / CP37S filings, your accounting team must input the precise legal entity and foreign tax ID details for each vendor:
| Service Platform | Operating Foreign Entity | Jurisdiction | Tax Identifier Type |
|---|---|---|---|
| Zoom | Zoom Video Communications, Inc. | USA | US Federal EIN (61-1648780) |
| Google Meet | Google Asia Pacific Pte. Ltd. | Singapore | Singapore UEN (200817984R) |
| Microsoft Teams | Microsoft Corporation / Regional Sales | USA / Singapore | US EIN (91-1144442) / Singapore UEN |
4. How to Submit WHT to LHDN (CP37 & CP37S)
- Calculate Tax Liability: Convert your software invoice into Ringgit Malaysia (MYR) using the payment date exchange rate and compute the 10% tax.
- Utilize Small-Value Relief (CP37S): If the WHT amount on an individual recurring subscription is RM500 or less, LHDN allows businesses to consolidate these small charges and remit them bi-annually (by July 30 and January 30) using Form CP37S. Larger invoices must be filed within 30 days using Form CP37.
- Submit via e-WHT: File online through the LHDN MyTax Portal, submit payment via FPX, and archive your filing records for at least 7 years.
Get the Complete Foreign Vendor Tax Identification (TIN) List
Finding exact foreign corporate entity names, tax identification numbers (EINs, UENs, ABNs), and registered addresses for every software vendor can consume hours of administrative research.
To easily find verified TIN details for platforms like Meta, Google, TikTok, Zoom, Microsoft, and dozens of other global SaaS tools for your Form CP37 filings, visit the Kode Digital Tax Identification Numbers (TIN) Database List.