EN 
MS 
FAQ Expansion of Service Tax Scope 2025
List of FAQs Implementation Expansion of Service Tax 2025
A: Based on Section 2, Private Healthcare Facilities and Services Act 1998 [Act 586]), “healthcare services” including as follows:
(a) medical, dental, nursing, midwifery, allied health, pharmacy, and ambulance services and any other service provided by healthcare professional;
(b) accommodation for the purpose of any service provided;
(c) any service for the screening, diagnosis, or treatment of persons suffering from, or believed to be suffering from any disease, injury or disability of mind or body;
(d) any service for preventive or promotive health purposes;
(e) any service provided by any para-healthcare professional;
(f) any service for curing or alleviating any abnormal condition of the human body by the application of any apparatus, equipment, instrument or device or any other medical technology; or
(g) any health-related services
A : Based on Section 2, Private Healthcare Facilities and Services Act 1998 [Act 586]), healthcare facilities is referring to any premises in which one or more members of the public receive healthcare services.
A : Based on Section 2, Private Healthcare Facilities and Services Act 1998 [Act 586]), “private healthcare facility provider” means any person providing private healthcare services and facilities to recipients.
A : Based on Section 2, Private Healthcare Facilities and
Services Act 1998 [Act 586]), “private healthcare
facility” means any premises, other than a Government
healthcare facility, used or intended to be used for the
provision of healthcare services or health-related services, such as a private hospital, hospice, ambulatory care centre, nursing home, maternity home, psychiatric hospital, psychiatric nursing home, community mental health centre, haemodialysis centre, medical clinic, dental clinic and such other healthcare or health-related premises as the Minister may from time to time, by notification in the Gazette, specify.
A : “Non-citizen” refers to an individual who is not a Malaysian citizen as defined by Malaysian citizenship
laws.
A : Based on Section 2, Service Tax Act 2018, “Designated area” means Labuan, Langkawi, Tioman, Pangkor and Pulau 1.
A : Based on Section 2, Service Tax Act 2018, “Special area” means any free zone, licensed warehouse and
licensed manufacturing warehouse, the Joint
Development Area, and a petroleum supply base
licensed under section 77B of the Customs Act 1967.
A : Based on Item 14, Group I, First Schedule, Service Tax Regulations 2018, the scope of healthcare services provided to non-citizens by any private healthcare facility registered or licensed under the Private Healthcare Facilities and Services Act 1998 [Act 586]
is subject to service tax.
A : The list of private healthcare facilities registered aor licensed under Act 586 is as follows:
(a) Private Hospitals;
(b) Private Psychiatric Hospital;
(c) Private Ambulatory Care Center (ACC);
(d) Private Nursing Home;
(e) Private Psychiatric Nursing Home;
(f) Private Maternity Home;
(g) Private Blood Bank;
(h) Private Hemodialysis Center;(i) Private Hospice;
(j) Private Community Mental Health Center;
(k) Private Medical Clinic;
(l) Private Dental Clinic;
(m) any private healthcare facilities or services or other health-related services as may be determined by the Minister, from time to time, by notification in the Gazette; and
(n) a private healthcare premises incorporating
any two or more of the facilities or services in paragraphs (a) to (m)
A : a) “healthcare professional” includes a medical practitioner, dental practitioner, pharmacist, clinical psychologist, nurse, midwife, medical assistant, physiotherapist, occupational therapist and other allied healthcare professional and any other person involved in the giving of medical, health, dental, pharmaceutical or any other healthcare services under the jurisdiction of the Ministry of Health.
b) Healthcare professionals must be persons registered with the appropriate professional regulatory body, dental, nursing or midwifery, medically related professions or any other regulatory body and hold a valid practicing certificate.
A : Healthcare services by private healthcare facilities to non-citizens are subject to service tax as follows:
(a) any medical, dental, nursing, midwifery, allied health, pharmacy and ambulance services provided by healthcare professionals;
(b) accommodation for the purpose of providing healthcare services;
(c) any service for the screening, diagnosis, or treatment of persons who is suffering from, or believed to be suffering from any disease, injury or disability of mind or body;
(d) any service for preventive or promotive health purposes;
(e) any service provided by any para-healthcare professional;
(f) Any consultation fees provided by any healthcare professional and registered medical practitioner;
(g) any service for curing or alleviating any abnormal condition of the human body by the application of any apparatus, equipment, instrument or device or any other medical technology;
(h) any food services provided to patients by the registered or licensed healthcare facility; or
(i) any mortuary services provided by the registered or licensed healthcare facility
A : Healthcare services by private healthcare facilities to non-citizens are subject to service tax as follows:
(a) any medical, dental, nursing, midwifery, allied health, pharmacy and ambulance services provided by healthcare professionals;
(b) accommodation for the purpose of providing healthcare services;
(c) any service for the screening, diagnosis, or treatment of persons who is suffering from, or believed to be suffering from any disease, injury or disability of mind or body;
(d) any service for preventive or promotive health purposes;
(e) any service provided by any para-healthcare professional;
(f) Any consultation fees provided by any healthcare professional and registered medical practitioner;
(g) any service for curing or alleviating any abnormal condition of the human body by the application of any apparatus, equipment, instrument or device or any other medical technology;
(h) any food services provided to patients by the registered or licensed healthcare facility; or
(i) any mortuary services provided by the registered or licensed healthcare facility
A : Based on Item 15, Group I, First Schedule, Service Tax Regulations 2018, any traditional and complementary medicine practices provided to non-citizens that are subject to service tax as follows:
1) Traditional Malay Medicine;
2)Traditional Chinese Medicine;
3) Traditional Indian Medicine;
4) Homeopathy;
5) Chiropractic;
6) Osteopathy; and
7) Islamic Medical Practices.
A : All services and activities related to allied health services provided to non-citizens are subject to service tax as per Item 16, Group I, First Schedule, Service Tax Regulations 2018.
A : Any person who operates or provides a place for practice of traditional and complementary medicine private services excluding private healthcare facilities under the Private Healthcare Facilities and Services Act 1998 [Act 586] are subject to service tax is liable to register service tax under Item 15, Group I which has reached the threshold of taxable service amount to RM1,500,000.00 for twelve months period.
A : Examples of traditional and complementary medical practice services provided to non-citizens that are subject to service tax include acupuncture, ayurveda, homeopathy and Chinese medicine.
A: Based on Item 16, Group I, First Schedule, Service Tax Regulations 2018, it refers to any of the following allied health related activities:
- Audiology;
- Dietetics;
- Entomology (Public Health);
- Physiotherapy;
- Physics Medicine;
- Nutrition
- Psychology Clinical;
- Radiography Diagnostics;
- Science Laboratory Medicine;
- Occupational Therapy;
- Therapy Speech-Language;
- Therapy Radiation;
- Technology Laboratory Medicine;
- Technology Dentistry;
- Environmental Health; or
- Health Education.
A: All services relating to allied health services and provided to non-citizens by any person operating or providing a place for the provision of private allied health related activities excluding private healthcare facilities under the Private Healthcare Facilities and Services Act 1998 [Act 586] are subject to service tax.
- Audiology;
- Dietetics;
- Entomology (Public Health);
- Physiotherapy;
- Physics Medicine;
- Nutrition
- Psychology Clinical;
- Radiography Diagnostics;
- Science Laboratory Medicine;
- Occupational Therapy;
- Therapy Speech-Language;
- Therapy Radiation;
- Technology Laboratory Medicine;
- Technology Dentistry;
- Environmental Health; or
- Health Education.
A: Examples of allied health services provided to non- citizens that are subject to service tax are services provided by dental technologists, environmental health, health education, food preparation (healthcare), forensic science and medical social work.
A: The effective date is 1 July 2025.
Private healthcare services, practice of traditional and complementary medicine private services and private allied health related services will be subject to service tax at a rate of 6%.
For services newly prescribed as taxable services, providers of private healthcare facilities, practices traditional and complementary medicine private services and private allied health related services that have reached the threshold value of RM1,500,000.00 in 12 months period are liable to register SST. SST Registration can be done online through the MySST website (mysst.customs.gov.my).
No. Malaysian citizens are exempted from paying service tax
Healthcare services, practice of traditional and complementary medicine private services and allied health related services provided by the Government is not subject to service tax
Based on the Private Healthcare Facilities and Services Act 1998 [Act 586], “Government healthcare facilities” refer to any facilities established, maintained, operated or provided by the Government excluding privatized or incorporated Government healthcare facilities
Situation 1:
Deposit payments are subject to service tax if they treated as part of the payment for services associated with healthcare services by private healthcare facilities, practice of traditional and complementary medicine private services and private allied health related services provided to non-citizens.
Situation 2:
Deposit payments are NOT subject to service tax if they are NOT part of the payment for services associated with healthcare services by private healthcare facilities, practice of traditional and complementary medicine private services and private allied health related services provided to non-citizens.
The service tax treatment on the provision of private healthcare facilities, practice of traditional and complementary medicine private services and private allied health related services to non-citizens located outside Malaysia is not subject to service tax.
The service tax treatment on the provision of private healthcare facilities, practice of traditional and complementary medicine private services and private allied health related services to non-citizens that is acquired from outside Malaysia is considered as imported taxable services (ImTS) and subject to service tax.
Services provided by all private healthcare facilities, practice of traditional and complementary medicine private services and private allied health related services to non-citizens in designated areas (DA) excluding Pulau 1 is not subject to service tax.
Services provided by all private healthcare facilities, practice of traditional and complementary medicine private services and private allied health related services to non-citizens in special areas (SA) is not subject to service tax
No service tax exemption is given to non-citizen categories.
No. Healthcare facilities by hospitals established, maintained, operated, provided or administered by a University or University College registered under the Universities and University Colleges Act 1971 [Act 30] and provided to non-citizens are not subject to service tax.
No. Healthcare facilities by hospitals established, maintained, operated, provided or administered by a University or University College registered under the Mara University of Technology Act 1976 [Act 173] and provided to non-citizens are not subject to service tax.
Yes. Private healthcare facilities that do not need to be SST registered persons are as follows:
- University Malaya Specialist Centre;
- Universiti Kebangsaan Malaysia Specialist Centre;
- Universiti Teknologi MARA Medical Specialist Centre; and
- International Islamic University Malaysia Medical Specialist Centre
Yes. Healthcare facilities by hospitals established, maintained, operated, provided or administered by a University or University College registered under the Private Higher Education Institutions Act 1996 [Act 555] and provided to non-citizens are subject to service tax.
Beauty treatment services mean ny treatment of the body or any part of the body, face or hair to treat or restore the skin of the body or face by using any substance or any equipment.
Types of beauty treatment services are as follows:
(1) Any treatment of the body or any part of the body, face or hair to treat or restore the skin of the body or face by using any substance or any equipment such as follows;
- Hydrotherapy on body or any part of the body;
- Any treatment relating body slimming;
- Facial, hand, foot or full body massage;
- Hair styling;
- Treatment of fingers or nails of hands or feet;
- Sauna;
- Herbal, milk or flower bath;
- tattooing;
- Spa; or
- Any other beauty treatment as defined in wellness centre subitem (a)
The service tax rate imposed on beauty treatment services provided to citizens and non-citizens is a flat rate of 8%.
The registration requirement for beauty treatment services is when the total value of taxable services has reach RM500,000 in 12 months period.
A: Anyone who provides construction work services, excluding residential building construction and public areas related to that residential
building, and where the value of the service exceeds the threshold value of RM1,500,000, must apply for registration online via the link:
www.mysst.customs.gov.my.
A: A registered person must submit the SST-02 service tax return through the electronic service (MySST), by post, or courier service to the Customs Processing Centre in Kelana Jaya. Payment methods include electronic banking, cheque, or bank draft. For payments using cheques or bank drafts, they must be sent by post or courier service to the Customs Processing Centre in Kelana Jaya. For more detailed, please refer to the Return and Payment Guide.
A: Yes. A registered person must issue an invoice for all construction work services performed. Please refer to the General Guide for further details.
A : Construction work services for residential buildings and public facilities related to those residential buildings are not subject to service tax.
A: Those who are exempted from paying service tax under construction work services are the Federal Government, the State Governments and the Local Authorities.
A: Construction work services are subject to a 6% service tax rate.
A: The value of construction work services is determined based on the actual value of the services provided, including the value of goods or raw materials used in providing the construction work services.
A: Charges subject to service tax include the value of all works and materials that are permanently constructed or installed at the building site or construction project and are billed by the contractor to the client.
Example:
ASM Sdn Bhd awards a contract to LTM Construction Sdn Bhd to construct a commercial building. Based on the contract agreement, the value of the construction services, including the value of materials and work performed, is RM6,000,000.
The service tax imposed is RM360,000 (RM6,000,000 × 6%).
A: The value of construction work services is based on the contract between the developer and the contractor. If the contract between the developer and the contractor specifies the payment as the work service fee, only the construction service fee will be subject to service tax. construction
A: You need to account for service tax on construction services at the time payment is received for taxable services provided by a registered person to the customer. However, if you have been approved by the Director General of Customs to use invoices as the basis of accounting, you must account for the service tax at the time the invoice is issued.
A: The service tax return and payment must be submitted to Customs every two months according to the prescribed taxable period.
A: No, you do not need to register because construction services for residential buildings are not taxable services.
A: Yes. Construction work services that being exempted are still considered taxable services, and those exemptions must be taken into account when calculating the threshold.
A: Yes, you are required to charge service tax on those construction work services. The provision of construction work services in the Designated Areas (DA) — Langkawi, Tioman, Pangkor, Labuan, or Pulau 1 — and Special Areas (Free Zones, Licensed Warehouses, Licensed Manufacturing Warehouses, Joint Development Areas, and Petroleum Terminals) by any contractor whose principal place of business is located in Malaysia is subject to service tax.
A: Yes, any contractor whose principal place of business is located in the Designated Areas and Special Areas who provides construction services in Malaysia is liable to register under Section 12 of the Service Tax Act 2018 if the taxable services provided exceed the prescribed threshold value. Once the contractor is registered, they must charge and account for service tax on the construction work services provided to their customers in Malaysia.
A: Service tax for construction work services related to progressive payments involving the issuance of certificates for work completed must be charged and accounted for at the time the payment is received. If payment is not received within 12 months from the date the service was provided, the service tax becomes due and must be paid on the day following the end of the 12-month period.
A: Yes, retention sum is subject to service tax. Therefore, the contractor must charge service tax on the retention sum payments.
A: Compensation and out-of-court settlements paid due to breach of warranty or delay in completing a contract are considered damages. Therefore, service tax is not imposed on such compensation and out- of-court settlements.
A: No, compensation charged due to delays in completing a construction project is not subject to service tax.
A: Service tax must be imposed on construction services provided on or after the effective date. The value of construction work done before the effective date is not subject to service tax.
A: The portion of retention sum under a construction contract related to construction work services provided before the effective date is not subject to service tax. However, if the provision of construction work services extends beyond the effective date, service tax must be imposed on the portion of the retention sum related to construction services after the effective date, based on Regulation 3A of the Service Tax Regulations 2018.
A: Yes, EPCC projects are considered construction work services and are subject to service tax under Group L, First Schedule, Service Tax Regulations 2018 – Construction Work Services.
A :
(i) Any private educational institution registered under the Education Act 1996 excluding special schools and language centres that provide pre-school, primary, lower secondary, upper secondary or post-secondary education services that charge fees exceeding RM60,000 per student for each academic year.
(ii) Any
a) higher education institution registered under the Universities and University Colleges Act 1971;
b) private higher education institution registered under the Private Higher Educational Institutional Act 1996; or
c) higher education institution registered under the Education Act 1996
(iii) Language centres registered under the Education Act 1996
A : Private education service providers not registered under the prescribed Act are not liable to register under the Service Tax Act 2018.
A :
(i) Educational services in Malaysia provided by the government are not subject to service tax.
(ii) Service tax is levied on private education services including private kindergartens, academic primary/secondary schools, religious primary/secondary schools, international schools, expatriate schools and chinese private secondary schools which charge fees exceeding RM60,000 per student for each academic year.
A : Higher education services in Malaysia are subject to service tax for non-Malaysian students studying at public higher education institutions, private higher education institutions or language centres.
A : Malaysian citizens and holders of a valid Disabled Persons (OKU) card issued under the Persons with Disabilities Act 2008 [Act 685] are given service tax exemption for education services by private educational institutions as stated under Item 10, Service Tax (Persons Exempted from Payment of Tax) Order 2018.
A :
(i) Based on section 9, Service Tax Act 2018 [Act 807], service tax is levied on the actual value of taxable services provided by the service provider to the service recipient.
(ii) Tuition fees paid by private companies that sponsor students are subject to service tax.
A :
(i) Based on section 9, Service Tax Act 2018 [Act 807], service tax is levied on the actual value of taxable services provided by the service provider to the service recipient.
(ii) Since the school sponsors the tuition fees, the school is required to account for service tax. (if exceeding RM60,000 per student for each academic year)
A : Service tax is not levied on payments for study trips abroad.
A : Yes, services provided by schools in Malaysia for student exchange programmes are subject to service tax.
A : No, only private school education service providers that charge fees exceeding RM60,000 per student for each academic year must be registered.
A : Education services are subject to a service tax rate of 6%.
A : The effective date for educational services to become taxable services is 1 July 2025.
A : Liable education service providers must register online starting 1 August 2025 by submitting the SST-01 form via the MySST system.
A : No. PTA fees are not subject to service tax.
A : Yes. MRSM is registered under the Education Act 1996 [Act 550] and established under the Majlis Amanah Rakyat Act 1966 [Act 489] and is liable to be registered if it charges fees exceeding RM60,000 per student for each academic year.
A : Yes, religious primary schools are registered under the Education Act 1996 [Act 550] and are liable to be registered if they charge fees exceeding RM60,000 per student for each academic year.
A : Yes, religious primary schools are registered under the Education Act 1996 [Act 550] and are liable to be registered if they charge fees exceeding RM60,000 per student for each academic year.
A : Driving schools are existing taxable persons under Item g, Group G, First Schedule, Service Tax Regulations 2018 [P.U.(A)214/2018].
A : For service tax purposes, taxable services provided within or betwee Special Areas and Designated Areas are subject to service tax treatment as prescribed in Part VIII and Part IX, Service Tax Act 2018.
A : As a registered person, service providers must comply with their responsibilities as a registered person in accordance with the provisions of service tax legislation and must adapt or amend their accounting systems as required.
A : Deposits are subject to service tax if they are part of the payment for the taxable service.
A :
(a) The list of private education service providers for primary and secondary schools can be viewed via the following link: https://smips.moe.gov.my/utama.cfm?cari
(ii) The list of private education service providers for IPTS can be viewed via the following link: https://jpt.mohe.gov.my/portal/index.php/ms/ipt/ipt-swasta/25-senarai-daftar-dan-statistik-ipt-swasta
A : The effective date for the implementation of service tax on rental or leasing services is 1 July 2025.
A : The threshold value for rental or leasing services is RM500,000.00.
A : The tax rate for rental or leasing services is 8%.
A : No. For those who are already registered under Group I, re- registration is not required but only need to amend the registration information under Item 13 and add the information on taxable services, which is rental or leasing services.
A : No. Where ownership of the asset is transferred to the lessee at the end of the lease term, it constitutes a financial lease, which is not subject to service tax.
A : No. Any rental under a hire purchase contract is not subject to service tax.
A : The rental service provided by FDB Enterprise to JNY Enterprise from February to May 2025 is not subject to service tax, as the service was provided prior to the effective date of 1 July 2025.
A : No. Rental or leasing services for assets or properties located outside Malaysia are not subject to service tax.
A : The rental of residential property is not subject to service tax. Therefore, service tax is only applicable to the warehouse rental: RM20,000.00 × 8% = RM1,600.00.
A : Yes. Rental or leasing services provided by a registered person whose principal place of business is in Malaysia to a special area or designated area, or vice versa, are subject to service tax. In this case, Kinta Free Zone is a special area and Pangkor Island is a designated area. Thus, YYY Sdn Bhd must charge service tax on the provision of such services.
A : Yes. The rental of the leisure boat is subject to service tax as the service is provided within Malaysia.
A : Deposits collected for security purposes and refundable are not subject to service tax. However, if the deposit is considered part of the payment for the service, it is subject to service tax.
A : No. The rental is not subject to service tax as full payment was received before the effective date.
A : Yes. DEA Sdn Bhd must charge service tax for the lease from July 2025 onwards.
A : No. Penalties are not considered the provision of taxable services and therefore are not subject to service tax.
A : The rental services are subject to service tax. However, FRMN is exempted from payment of service tax under the power of the Minister of Finance persuant to the provisions of Subsection 34(3) of the STA 2018.
A : Any financial service provider whose taxable services exceed the RM500,000 threshold must register under the Service Tax Act 2018
A : No, some financial services and charges are excluded from service tax,
including:
a. Interest or spread-based charges (e.g., loan interest)
b. Late payment penalties
c. Compensation for dishonoured cheques
d. Overdraft excess fees
e. Financial services related to exports
A : Group H covers financial services such as banking, insurance, and investments, whereas Group G covers non-financial services such as management and consultancy.
A : No, financial services provided to the Federal Government or State Government are excluded from service tax.
A : Since financial advisory services are taxable in Malaysia, the company must self-account for the service tax on the services received.
A : This service is included in the exclusion from service tax (i.e. financial services related to goods, land or matters outside Malaysia). Therefore, the value of these services is not included in the threshold calculation. All services listed in the exclusions cannot be included in the threshold calculation.
A: No, the service provided does not qualify for group relief.
A: No, the service provided does not qualify for group relief. However, the
companies may be eligible for the B2B exemption if all the conditions are fulfilled.