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


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)


  • 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


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?