Goods purchased under ATMS scheme

What is Approved Toll Manufacturer Scheme

Approved Toll Manufacturer Scheme (ATMS) is a scheme which allows any taxable person approved (toll manufacturer) to disregard any value added activity (contract services) on the goods belonging to a person who does not belong in Malaysia (overseas principal). Under this scheme, the toll manufacturer will receive goods sent by his overseas principal for any treatment or processing. 
After the treatment, most of the processed goods (at least 80%) must be sent back to the overseas principal or to any other countries as instructed by the overseas principal. The balance (maximum 20%) is allowed to be drop shipped to the local customer of the overseas principal.

Who are eligible for ATMS

Any toll manufacturer who has contract(s) with overseas principal(s) to carry out valued-added activities worth RM2 million or more (excluding the cost of raw materials supplied or belonging to the overseas principal) per annum is eligible to apply for the ATMS subject to approval given by the Director General.
The person must be GST registered.

Performing ATMS transaction using EMP

Scenario 1

• Transactions involved are Good Received Note, Manual Supplier Invoice, Supplier Credit Note.
• During the transaction, user need to chose a special Tax Code named: ATMS
• Tax rate for ATMS code must be 0%

• During the filing process Tax Filing for Purchase Transactions (Full Tax Claimable) system will automatically detect the special tax code ATMS and record in accounting:

  	debit	credit
  default input tax gl	the item’s amount * Tax Rate for Tax Code = “TX”
  default output tax gl		the item’s amount * Tax Rate for Tax Code = “DS-ATS”

• Filing of the Input and Output Tax:

  doc	tx_type	tax_code	tax_rate	tax_amount
  source doc type	VAT_INPUT	TX	6%	the item’s amount * Tax Rate for Tax Code = “TX”
  source doc type	VAT_OUTPUT	DS-ATS	6%	the item’s amount * Tax Rate for Tax Code = “DS-ATS”

Scenario 2

• Transactions involved are Purchase Return, Supplier Debit Note.
• During the transaction, user need to chose a special Tax Code named: ATMS
• Tax rate for ATMS code must be 0%

• During the filing process Tax Filing for Purchase Transactions (Full Tax Claimable) system will automatically detect the special tax code ATMS and record in accounting:

  	debit	credit
  default input tax gl	the item’s amount * Tax Rate for Tax Code = “TX”
  default output tax gl		the item’s amount * Tax Rate for Tax Code = “DS-ATS”

• Filing of the Input and Output Tax:

  doc	tx_type	tax_code	tax_rate	tax_amount
  source doc type	VAT_INPUT	TX	6%	the item’s amount * Tax Rate for Tax Code = “TX”
  source doc type	VAT_OUTPUT	DS-ATS	6%	the item’s amount * Tax Rate for Tax Code = “DS-ATS”

Effect on GST-03 Return form

• As ATMS transaction effect both input and output tax, total amount of the Transaction (exclusive of tax) will go to 6a (Taxable Purchases) & 5a (Taxable Supplies)
• Total tax amount will be shown at 6b (Input Tax) and 5b (Output Tax)