SST Increases to 8% Today

Understanding the Expanded Scope of Service Tax with the New Rate in Malaysia

The Sales and Service Tax (SST) rate in Malaysia has increased from 6% to 8%, effective today, March 1, 2024, as announced in both the Malaysia Budget 2024 and the Royal Malaysian Customs Department.

The expanded taxable service scope is effective from February 26, 2024, with the new tax rates taking effect on 1 March 2024.

Check out the list of services that are subjected to 8% service tax:-

Group A 8%

• Hotels, serviced apartments, bed & breakfasts

Group B 6%

• Restaurants, bars or coffee shops

Group C 8%

• Nightclubs, dance halls, cabarets, wellness centres, massage parlours
• *Proposed expansion of the scope of Service Tax: Karaoke Centres

Group D 8%

• Private clubs including clubhouses based on membership, profession, or class

Group E 8%

• Golf courses or golf driving ranges

Group F 8%

• Betting, lottery, gambling machines or games of chance

Group G 8%

• Legislation, Accounting, Assessment, Engineering, architecture, Consulting, training & coaching Information technology (IT)/digital Management services (maintenance, warehousing, collection & debt, parking cars, sports and secretarial facilities), Employment services, Guard/protection services (security)
• *Proposed expansion of the scope of Service Tax: Services maintenance or repair

Group H 8%

• Credit card services RM25/year

Group I 8%

• Insurance & takaful, Telecommunications, Customs agents, Vehicle parking space providers, Motor vehicle services, Courier services, Rental and chauffeur services, car rental, and excursion bus services, Advertising, Domestic electricity supply >600kWh Domestic travel except Rural Air Services (RAS), Brokering & guarantor, Cleaning.
• *Proposed expansion of the scope of Service Tax: Brokerage and underwriting services in relation to: Ships or airplanes; Commodities; Real estate; Any other; brokerage or underwriting service.
• Except for: Telecommunications; Space provider (parking) vehicles; and Food and beverage drinks (F&B) *The 6% rate remains.

Group J 6%

• Logistics services
• Full or part of the supply chain and logistics management services, service warehousing or warehouse management, freight forwarding services, service port or airport services shipping, aviation services or cold chain facility service
• Cargo transportation or distribution
• Transportation of goods, documents or parcels through e-commerce platforms
• Courier services under section 10 of the Postal Service Act 2012 (Act 741)
• Customs agents

Registration threshold: RM500,000:

• The threshold for the total amount of taxable services is set at RM500,000 and registration is required for all.

• Threshold calculation will be based on the total value of all services the service provider has provided in the past 12 months.

(Sources: Finance Ministry)

Here are some resources to learn more about the SST:

• The Royal Malaysian Customs Department: https://mysst.customs.gov.my/
• News articles explaining the SST: [Search Malaysia SST 8% on Google search.google.com]