A New Sales and Services Tax to be Reintroduced Starting September 1

Updated on Tuesday 31st July 2018

The Malaysian government will reintroduce, starting with 1st of September 2018, a new sales and services tax (SST) which is set to cover more products and services as the previous SST had a narrow scope and it did not generate sufficent income. Businessmen who want to open a company in Malaysia should take into consideration that specific lifestyle goods will be taxed at a higher rate. Our team of consultants in company formation in Malaysia can offer tax advice on the taxes that are imposed to local businesses. 
 

Tax rates under the new Malaysian SST 
 

According to the new legislation referring to taxation in Malaysiaproviding services will be taxed at 6%, while the sale of goods will be imposed with a rate of 10%. Although the Malaysian authorities reintroduced the SST, the new tax rules will not affect lower-income groups living in this country. 
 
Even if the prices for certain categories of goods and services may increase, it is noted that the overall prices will decrease due to the fact that the SST is imposed on a single tier, compared to the goods and services tax (GST) which was applied at each tier of the supply chain. For example, the tax rate of 10% will be applicable at a manufacturer level, while  the services tax (tax rate of 6%) will be imposed at an end-consumer level. Our team of specialists in company registration in Malaysia can provide more details regarding this subject. 
 

Products affected by the new SST in Malaysia 
 

As a general rule, the local authorities are expecting to observe an increase in the prices of large consumer products, such as:
 
vehicles;
electrical goods;
luxury goods
 
It is important to know that for certain categories of goods, such as foodstuffs or beverages, the prices will become slightly lower than under the current tax regulations.  
 
Businessmen interested in starting a business in this country can contact our team of representatives in company registration in Malaysia for in-depth advice on the new tax imposed to local companies, as well as in-depth advice on other corporate taxes