[Updated 12/06/26] Tax rules and Google's billing details can change without notice. We do not promise to update this page when that happens.

Read this first

This page is simply how we, as a Google Ads agency, pay withholding tax on our own Google Ads spending each month. We are not LHDN officers, not tax agents, and not lawyers.

We first wrote this as a private note so our own staff could repeat the steps without relearning them every time. We share it because many Malaysian business owners search for this exact topic and cannot find a clear explanation.

So please treat this as "here is what we do", not as instructions for you to follow blindly. By reading or using this page, you agree to our [Terms of Use] (https://treey.my/pages/terms-of-use). This is not tax, accounting, or legal advice, and using it does not create any advisor relationship with us. Before you pay anything to LHDN, please check with LHDN (call HASiL at 03 8911 1000) or your own tax agent.

Why do we even need to pay this tax?

When a Malaysian business uses Google Ads, the bill actually comes from Google Asia Pacific Pte. Ltd., a company based in Singapore.

LHDN has a rule (Practice Note No. 1/2018) that says: if you log in and run your own Google Ads campaigns yourself, the payment is treated as a "royalty" payment to Google. Royalty payments to foreign companies are subject to a tax called withholding tax.

The rate: 8% instead of 10%, but only with proof

(official link)

The default withholding tax rate on a royalty paid to a foreign company is 10%. Because Google Asia Pacific is a tax resident of Singapore, the tax treaty between Malaysia and Singapore lowers the rate on royalties to 8%.

The lower 8% rate is not automatic. To claim a treaty rate, LHDN requires proof that the payee really is a tax resident of the treaty country. That proof is a document called a Certificate of Residence (COR), issued by the foreign tax authority (in this case, Singapore's).

Honest note on where to get the COR: we are not aware of a single official page where this certificate can simply be downloaded for free for the Singapore Google entity. What works is to contact Google Ads support directly and request the Certificate of Residence for Google Asia Pacific Pte. Ltd. for the relevant year, and keep whatever they provide. If anyone tells you there is an easy public download link, verify it yourself before relying on it. We would rather tell you we are unsure than send you to a link we have not confirmed.

How to read the Google invoice?

Let us use a real Google Ads tax invoice as the example.

• Subtotal in MYR: 28,035.54 — this is the figure you use for withholding tax
• Service tax (8%): 2,242.84 — Ignore it for withholding tax
• Total in MYR: 30,278.38 — do not use this

How we calculate the tax? (the cautious way)

Using this invoice, with a valid COR (8%):

• Rate: 8%
• Step 1, RM28,035.54 ÷ 0.92 = RM30,473.41
• Step 2, RM30,473.41 × 8% = RM2,437.87
• Net amount Google receives: RM28,035.54

Why we work it out "backwards" (gross up)? There is a published rule (Public Ruling No. 11/2018) that lets you skip this backwards step for a different type of payment, section 109B, when the payer absorbs the tax. The wording of that concession names section 109B only. Google Ads royalty falls under section 109, and we have not found a published ruling that clearly extends the same concession to section 109. So, to be safe, we keep working it out the backwards way.

Some practitioners apply a flat 8% on the subtotal instead, based on guidance they say LHDN gives informally. On this invoice that flat method gives RM28,035.54 × 8% = RM2,242.84. You will notice that is exactly the same as the Service tax line on the invoice, because both are 8% of the same subtotal, which makes a handy sanity check. The backwards (gross up) method we use gives RM2,437.87, about RM195.03 more on this invoice. That may well be acceptable, but since the flat method is not something we can point to in writing for section 109, we choose the method that can never result in underpaying. If your tax agent confirms the flat method is fine for you, that is a decision for you and them.

How to Pay Withholding Tax Online?

1. Visit https://mytax.hasil.gov.my and login to your account.

2. Select "e-WHT" from the dropdown menu.

3. On the left panel, select "CP37" and tick the CP37 checkbox.

4. In the "Particulars of Payer" section, enter your information.

5. In the "Particulars of Person To Whom Interest / Royalty Had Been Paid / Credited" section, be sure to include the following details if you are paying for Google Ads.

Google Asia Pacific Pte. Ltd.
Mapletree Business City II
70 Pasir Panjang Road, #03-71
Singapore 117371

6. [Particulars Of Deductions] We fill the columns like below:

• Others royalty rate: 8%
• Period From/To: The service period on the invoice
• Date royalty paid / credited: The date you actually paid Google
• Gross amount (RM): 30,473.41 (28,035.54 ÷ 0.92)
• Amount of deduction (RM): 2,437.87 (30,473.41 × 8%)
• Net amount paid/credited (RM): 28,035.54 (Subtotal in MYR of tax invoice

Compare Our Google Ads Pricing

7. Carefully review all information before submitting the form.

8. Generate bill number (Updates is not allowed after bill number was generated. Please ensure all the information is accurate).

9. Pay online via ByrHASIL option.

10. Maintain accurate records of your payment receipts for tax filing. Remember, withholding tax payments must be made within one month of the date you pay Google Ads. 

One last thing

This page is our own notes, shared in case it helps. One part of this topic is genuinely unsettled, whether the simpler "flat 8%" calculation can be used for Google Ads royalty or not, and we have explained our own cautious choice and our reasons. By using this page you agree to our Terms of Use and accept that this is not professional advice. For anything that matters, LHDN or a licensed tax agent are the only sources whose answer counts.

Sources we relied on:

• http://lampiran1.hasil.gov.my/pdf/pdfam/PR_11_2018.pdf
• https://phl.hasil.gov.my/pdf/pdfam/PN_NO_1_2018.pdf
• www.hasil.gov.my/en/legislation/withholding-tax
• www.pwc.com/my/en/assets/publications/Taxavvy/2018/taxavvy-issue-10-2018-r.pdf
  mysst.customs.gov.my/About
• assets.kpmg.com/content/dam/kpmg/my/pdf/External/2018-04-04-practice-note-no-1-2018-tax-treatment-on-digital-advertising-provided-by-a-non-resident.pdf
  
• https://www.taxathand.com/article/10773/Malaysia/2018/New-public-ruling-issued-on-withholding-tax-on-special-classes-of-income

Disclaimer: TREEY operates solely as a Google Ads agency and does not provide tax, accounting or professional advisory services. All information is shared for general reference based on our operational experience with eWHT for advertising spend. It does not constitute tax advice. Tax regulations can be complex and change over time. Always consult the Inland Revenue Board of Malaysia (LHDN) website or a qualified tax professional for the most accurate and up-to-date advice to ensure compliance with your tax obligations.

The Author

TREEY® is a certified Google Partner that elevates brands' online presence with SEO and Google Ads expertise since 2012. We work with only 2 companies per industry, helping them outrank 90% of competitors on Google Ads. No contract!