Background

a) SALES TAX

 

Sales tax is a tax charged and levied:-

  • on taxable goods manufactured in Malaysia by a taxable person and sold, used or disposed by him;

  • on taxable goods imported into Malaysia.

Sales tax is not charged on:-

  • goods listed under Proposed Sales Tax (Goods Exempted From Sales Tax) Order;

    • Certain manufacturing activities are exempted by Minister of Finance through Proposed Sales Tax (Exemption from Registration) Order.

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How Sales Tax Works?

 

Taxable Person

Taxable person is a person who manufactures taxable goods and is:-

  • liable to be registered

    • Reached sales threshold

      • Manufacturer -- RM 500,000.00

      • Sub-contractor -- RM 500,000.00

  • registered under Sales Tax Legislation

    • Mandatorily registered

    • Voluntarily registered

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b) SERVICE TAX

 

Service tax is charged:-

  • taxable services;

  • provided in Malaysia

  • by a registered person carrying on his business

Service tax is not chargeable:-

  • imported services

Threshold:-

  • Any person providing taxable services liable to be registered if the total amount of taxable services provided by him in 12 months exceed RM500, 000.

Rate of tax:-

  • Fixed at a rate of 6%.

  • Provision of credit card or charge card services

    • A specific rate of tax of

Licensing:-

Any person who carries on business of providing taxable services in any prescribed establishment is required to be licensed under the service tax act.

 

 

How Service Tax Works?