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Malaysia’s 2025-26 tax revisions, effective 1 July 2025, adjust Sales Tax rates on discretionary goods and expand Service Tax coverage to sectors like leasing, construction, healthcare, education, and beauty services.
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Sales Tax remains at 0% for essential goods; discretionary items face 5% or 10% rates depending on classification, with imported fruits now subject to tax, while locally grown fruits remain exempt.
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New Service Tax rates range from 6% to 8% depending on the sector, with specific revenue thresholds and exemptions set for each service category to minimize cascading tax effects.
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Companies newly subject to Service Tax must assess revenue thresholds; those reaching thresholds in July must register by August, with tax collection starting September 2025 and a penalty grace period through December.
Source: Orbitax
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