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Starting 1 July 2025, Sales Tax rates in Malaysia will increase to 5–10% on luxury and non-essential goods, while essential items will retain their existing lower tax rates.
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The Service Tax will expand to cover sectors like leasing, construction, education for non-Malaysians, wellness, and private healthcare, with rates ranging from 6% to 8% depending on the service.
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Businesses are granted a compliance grace period until 31 December 2025, with exemptions available for B2B services, intra-group transactions, and qualifying contracts under the updated legislation.
Source: vatcalc.com
