Sales and Service Tax

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Sales and Service Tax

We are also licensed SST (Sales and Service Tax) agents and we have also prepared a set of FAQ on SST matters:

Sales and Service Tax, often abbreviated as SST, is a single stage taxation levied at manufacturer or consumer level (GST is levied at multiple stages from manufactures to consumers). Almost all businesses or companies are required to register for SST, those businesses with annual turnover more than specific threshold requires licensing for the taxes whereas those below the taxation threshold(will not be levied), will also require a certificate. As of this writing, the Sales Tax is at 5 – 10% whereas Service Tax is at 6%.

GST is reduced to 0% since June 1st 2018 whereas SST is set to implement on 1st September 2018 nationwide. There are 2 main categories fall under SST: the Sales Tax, and the Services Tax.

What is Sales Tax?

Sales is initially introduced in February 1972 and is a single stage consumption tax. The levy is charged and paid on the goods which are manufactured in Malaysia and the goods imported to Malaysia as well as the locally manufactured goods at the time the goods are sold or otherwise disposed of by the manufacturer.

Should I apply?

Manufacturers of taxable goods whose annual sales turnover exceed RM100,000 is required to be licensed under sales tax act. Those with annual sales turnover does not exceed RM100,000 are required to apply for a certificate of exemption from licensing. Generally, all goods, including motor vehicles, are subject to sales tax at the rate of 10% under the Sales Tax (Rates of Tax No.1) Order 2012 which came into operation on October 31, 2012.

Sales Tax: Threshold Level Taxable Services

No Threshold
Hotel of having more than 25 rooms (Group A) Restaurant, Bar, Snack-Bar, Coffee Houses located in hotel having more than 25 rooms (Group 131) Night-Clubs, Dance Hall, Cabarets, Health Centre, Massage Parlours, Public Houses and Beer Houses (Group D) Provision of insurance services to business organisation Provision of telecommunication services Provision of services for the clearing of goods from customs control Provision of accounting services by the Public Accountant Provision of legal services by the Legal Firms Provision of engineering services by the Professional Engineers Provision of architecture services by the Architect Provision of surveying services by the surveyor Provision of Consultancy services by the Consultant Companies Provision of management services by Management Companies Provision of credit card or charge card services

No Threshold

Hotel of having more than 25 rooms (Group A)
Restaurant, Bar, Snack-Bar, Coffee Houses located in hotel having more than 25 rooms (Group 131)
Night-Clubs, Dance Hall, Cabarets, Health Centre, Massage Parlours, Public Houses and Beer Houses (Group D)
Provision of insurance services to business organisation
Provision of telecommunication services
Provision of services for the clearing of goods from customs control
Provision of accounting services by the Public Accountant
Provision of legal services by the Legal Firms
Provision of engineering services by the Professional Engineers
Provision of architecture services by the Architect
Provision of surveying services by the surveyor
Provision of Consultancy services by the Consultant Companies
Provision of management services by Management Companies
Provision of credit card or charge card services

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Annual Sale Turnover of RM 150,000 and above
Services provided by Professional under Group G as follows: Provision of parking spaces for motor vehicles Provision of courier delivery services Provision of motor vehicles service and repair centres by the Workshop Provision of security guard or body-guards services by the Private Agency Provision of employment services by the Employment Agency

Annual Sale Turnover of RM300,000 and above
Restaurants, Bar, Snack-Bars, Coffee Houses located in the Hotel having 25 rooms and less (Group B2) Services provided by Private Clubs including golf clubs (Group E) Services provided by Private Hospitals (Group F) Services provided by operators of hire-an-drive or hire-car companies (Group G) Services provided by advertising agency (Group G)

Annual Sale Turnover of RM3,000,000 and above (effective from lst July 2008)
Restaurants, Bar, Snack-Bars, Coffee Houses located outside the Hote including food courts (Group C)

What is Service Tax?

Service Tax is firstly introduced in March 1975 and a few constantly refinement since then. The current Service Tax rate is 6% and like Sales tax, it is also a single stage consumption tax.

Should I apply?

For all taxable services, charged and paid on specific services provided by a taxable person in Malaysia. Yes, for most of the businesses or companies, it is required. To find out if a service is affected, please to the table: