- Malaysia will expand its Sales and Services Tax (SST) framework starting July 1, 2025, as part of Budget 2025.
- The expansion aims to broaden the tax base without affecting essential goods or lower-income households.
- Businesses, especially in the services sector, will face new compliance obligations and registration requirements.
- Sales tax will now cover more consumer and luxury goods, including imported fruits, king crab, salmon, essential oils, premium fabrics, antique artwork, and racing bicycles, with a tax rate of 5 to 10 percent.
- Essential goods like staple foods, books, school materials, medical products, and key building materials remain zero-rated.
- The expanded SST is expected to generate an additional 3 billion ringgit annually, mainly from high-consumption service sectors and luxury goods.
- Transitional rules apply for goods sold and invoiced before July 1 but delivered later, requiring accurate documentation to avoid tax liabilities.
- The service tax regime now includes over 30 additional service categories, such as logistics, warehousing, brokerage, private healthcare, and software development.
- Most services will be taxed at 6 percent, while some, like brokerage and beauty services, will be taxed at 8 percent.
- Private healthcare services for Malaysian citizens remain exempt, but non-Malaysian patients will be taxed at 6 percent.
- Imported taxable services remain within the SST framework, affecting foreign service providers offering services to Malaysian recipients.
Source: aseanbriefing.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
