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Sales Tax and Service Tax

Sales Tax and Service Tax in Malaysia were re-introduced on 1 September 2018, replacing GST. Sales Tax is a single-stage tax imposed on locally produced and imported goods at rates of 5%, 10%, or specific rates. Exported goods and certain exempted items are excluded from Sales Tax. Service Tax of 6% is imposed on businesses providing specified taxable services exceeding RM500,000 annually. Businesses must register by the last day of the month if thresholds are exceeded. Tax periods are two months ending on the last day of each calendar month.

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267 views

Sales Tax and Service Tax

Sales Tax and Service Tax in Malaysia were re-introduced on 1 September 2018, replacing GST. Sales Tax is a single-stage tax imposed on locally produced and imported goods at rates of 5%, 10%, or specific rates. Exported goods and certain exempted items are excluded from Sales Tax. Service Tax of 6% is imposed on businesses providing specified taxable services exceeding RM500,000 annually. Businesses must register by the last day of the month if thresholds are exceeded. Tax periods are two months ending on the last day of each calendar month.

Uploaded by

Raudhatun Nisa'
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Sales Tax and

Service Tax
Sales Tax and Service Tax in Malaysia

In Malaysia, Sales and Service Tax(SST) was officially re-introduced


on 1 September 2018, replacing the former three-year-old Goods and
Services Tax (GST) system.
Sales Tax

•The Sales Tax is a single-


levied on manufactured & stage tax imposed only at one Exported manufactured The sales tax rate is at
locally produced goods stage in the supply chain, i.e., goods will be excluded 5%,10%, or on a specific
and imported into at the import or manufacturing from the sales tax act. rate or exempt. However, at
Malaysia level. the same time, not all
•An exception will only be products are necessary to be
allowed for those taxed. It is for this reason
manufacturers of taxable that goods are taxable unless
goods paid for their raw specifically listed as being
materials, components, and exempt from sales tax.
packaging materials.
How sales tax works
Sales tax rate
taxable goods and imported
construction materials, timepieces, taxable goods in Malaysia, a
cod liver oil, telecommunications, single-stage sales tax is charged Exempted goods
foodstuffs, IT, and printing by the registered manufacturers
materials and hardware (default tax rate)

5%
10% Exempt
Exemption from sales tax
 All goods that are manufactured for export will be exempt from sales tax.
 Following are the other goods exempted from sales tax:
 Live animals, fish, meat, seafood, milk, eggs, vegetables, fruits, bread.
 Books, magazines, newspapers, journals, and periodicals.
 Bicycles, including certain parts and accessories.
 Naturally occurring mineral substances, chemicals, etc.
 Pharmaceutical products such as medical cream, medicine, medical cream, cough syrup,
bandage, medicaments containing multivitamin & minerals, etc
 Fertilizers (animal origin or chemical) and insecticides.
 Articles of goldsmiths such as gold or platinum jewelry, silver tableware, etc.
Sales tax registration
A business is liable to pay SST if the total sales value of taxable
goods exceeds RM500,000 in the past 12 months
Service tax
Service Tax is charged on a specific service provided
by a taxable person in Malaysia carrying out a
business of taxable services 01
(Service tax rate is 6%)

Taxable person
Business is working under the
Service Tax Act 2018 and is a service
provider of taxable services and in the past 12
02
months, the total value of taxable services
exceeds the registration threshold, which is
RM500,000 (register).

Taxable services
03
Group A - I
Exception of service tax (to register)
How service tax
works
Sales tax and service tax registration due date
Registration due date is on the last day of the month, following the month in
which the total sales amount has exceeded or is expected to exceed the threshold.
For Example:

Date Registration Date

29 February 2022 Total sales value of taxable goods or services exceeds the
threshold

31 March 2022 Last day to apply for registration

1 April 2022 Effective date of registration


Taxable period
The first taxable period of every taxable person shall begin from the date the
business should have been registered under section 13 STA 2018 and end on the
last day of the following month and the subsequent taxable period shall be a
period of two months ending on the last day of any month of any calendar year.
Example
Ali Engineering Sdn Bhd (AESB) is principally involved in the provision of engineering services
with an annual turnover of RM3 million.  It purchased computers from a local trading company as
well as imported a design machine from Singapore.  It also procured accounting services from Baba
& Co, a service tax registrant. 

AESB is required to be registered as a taxable person for The purchase of computers from a local trading
service tax purposes as the provision of engineering services company is not subject to sales tax as sales tax is only
is a taxable service and it has exceeded the registration applicable if AESB purchases them directly from a
threshold of RM500,000.  As such, AESB will be required to manufacturer or imports them
charge and collect service tax in relation to the engineering
service fee invoiced to its customers

The importation of the design machine from Singapore is In respect of the accounting service provided by Baba
subject to sales tax even though AESB is not a sales tax & Co, Baba & Co will charge service tax on the
registrant.  The sales tax will be collected at the point of accounting fee invoiced to AESB.
importation, when clearing the goods from Customs.

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