Background

a) SALES TAX

Sales tax is a tax charged and levied:-

  • on taxable goods manufactured in Malaysia by a taxable person and sold, used or disposed by him;
  • on taxable goods imported into Malaysia.

Sales tax is not charged on:-

  • goods listed under Proposed Sales Tax (Goods Exempted From Sales Tax) Order;
    • Certain manufacturing activities are exempted by Minister of Finance through Proposed Sales Tax (Exemption from Registration) Order.

How Sales Tax Works?

Taxable Person

Taxable person is a person who manufactures taxable goods and is:-

  • liable to be registered
    • Reached sales threshold
      • Manufacturer -- RM 500,000.00
      • Sub-contractor -- RM 500,000.00
  • registered under Sales Tax Legislation
    • Mandatorily registered
    • Voluntarily registered


b) SERVICE TAX

Service tax is charged:-

  • taxable services;
  • provided in Malaysia
  • by a registered person carrying on his business
  • imported taxable services (c.i.o 1 January 2019)

Threshold:-

  • Any person providing taxable services liable to be registered if the total amount of taxable services provided by him in 12 months exceed threshold.

Rate of tax:-

  • Fixed at a rate of 6%.
  • Provision of credit card or charge card services
    • A specific rate of tax of

Licensing:-

Any person who carries on business of providing taxable services in any prescribed establishment is required to be licensed under the service tax act.

How Service Tax Works?