Sales Tax

Sales Tax Act 2018

Malaysia reintroduced Sales Tax on 1 September 2018. Manufacturer and sub-contractor are liable to register with Royal Malaysia Customs Department (RMCD) in order to collect the sales tax from their client. While for those businesses that are not liable to register, you have to take into consideration of the 10% sales tax that you have to pay upon importation or to your supplier who is a manufacturer while setting your product pricing.

Let us start on guiding you to determine whether you should register your business under the Sales Tax Act 2018. We made it simple for you.

If you are carrying a business in Malaysia, then you have to proceed to Step 2. If you are not doing business, Sales Tax application is not applied to you.

The definition of manufacturer means conversion of materials by manual or mechanical into a new product by changing the size, shape, composition, nature or quality of such materials. It includes the assembly of parts into a piece of machinery or other products. However, it excludes the installation of machinery and equipment for the purpose of construction.

In relation to petroleum, any process of separation, purification, refining, conversion and blending.

If your company is doing one of the above activities, please proceed to Step 3.

You may download the list of exempted goods here. Before proceed to the list, please have your product tariff code ready. If you are unsure of your product tariff code, please refer to the officers at the Malaysia Royal Customs Department Head Office or any of its branches office for assistance. This service is provided free of charge. You may visit www.customs.gov.my for more info.

Once you have your tariff code ready, please go through the list that you have just downloaded above. If your product is listed in the Sales Tax (Goods Exempted from Tax) Order 2018, you are not required to register under Sales Tax Act 2018. However, if your product is not listed or partially not listed, please proceed to Step 4.

If the yearly revenue is more than RM500,000, please register your company here. Once you have register as a Sales Tax licensee, you have to comply accordingly. Do talk to us if you need further assistance.

If your yearly revenue does not exceed RM500,000, you do not require to register. However, you have to monitor your sales amount closely, once it reached the threshold, you have to register your company and start collecting Sales Tax.

Am I required to be registered under Sales Tax Act 2018?