VAT in Malaysia

Updated on Monday 30th October 2017

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Malaysian fiscal system has several particularities, which are not common in other states. It is the case of value added tax (VAT), as it has recently been introduced in the national legislation, although this type of tax is rather common in most of the world’s jurisdictions. VAT in Malaysia is actually named the Goods and Sales Tax (GST), but it is very similar with the concept of VAT. The GST replaced, starting with April 1st, 2015, the Sales and Service Tax. Our team of company incorporation specialists in Malaysia can provide an extensive presentation on the local legislation referring to GST.

The Malaysian GST 

The GST in Malaysia replaced the Sales and Service Tax, which was introduced in the national taxation system in 1970s. The tax was a consumption one and the change was an effect of the local policies, which are trying to enrol to the international standards of taxation. The Malaysian VAT was established at the rate of 6%, but it is important to know that most of the products which enter in the category of foodstuff are exempt of the tax burden. Amongst the foodstuffs exempt from GST, we mention the following: 

•    agricultural products; 
•    basic products, such as oil, salt, flour, eggs, water, fish;
•    several import/export products. 

Our team of company formation representatives in Malaysia can provide more details on the regulations imposed by the local authorities. 

The video below offers a short presentation on the value added tax in Malaysia:


Products exempt from VAT in Malaysia 

Businessmen who want to open a company in Malaysia or persons who are interested to relocate here should know that the country provides a wide area of products and services which are exempt from the VAT. Except from the above mentioned, Malaysia does not require the application of the GST for the following: 

•    the domestic use of electricity – the first 300 kwh are free of charge;
•    goods which are supplied to several Malaysian regions;
•    exported products and several exported services;
•    international transport of passengers and goods (when the actions are performed from Malaysia to another country);
•    the sale of residential property;
•    several types of oil. 

Persons who are interested in receiving further information on the VAT in Malaysia can address to our team of company formation agents in Malaysia for assistance. 



June 13, 2016

Asian countries are quite different than European and American ones in terms of the general taxes applied by the local authorities. The level of taxation is also very different, because most of the Asian countries apply smaller VAT rates. I'd be interested to know what was the effect of the new GST on the local economy.

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