Registering your Business

a) SALES TAX
  • Taxable goods manufacturers are required / liable to be registered when;
    • SALES VALUE OF TAXABLE GOODS has exceeded RM500,000 for 12 months period;
  • Manufacturers who carry out sub-contract work on taxable goods where the VALUE of work performed exceeds RM500,000 for 12 months period.
    • Taxable goods belong to:
      • Registered manufacturer, non-registered manufacturer and manufacturer in special area (FIZ and LMW).
  • Note: Registered Person will be known as Registered Manufacturers
  • Voluntary registration
    • Taxable goods – below threshold.
    • Persons who are exempted from registration
  • Determination of Turnover
    • Manufacturers should calculate the sales value of taxable goods for a period of 12 months using the following methods:
      • Historical Method;
        • The total value of taxable goods in that month and the 11 months immediately preceding the month;
      • Future Method;
        • The total value of taxable goods in that month and the 11 months immediately succeeding the month.
  • Exemption from Registration
    • Manufacturer of non-taxable goods*.
    • Manufacturer below threshold
    • Sub-contractor manufacturer below threshold
    • Manufacturing activities that have been exempted from registration. E.g.:
      • Tailoring
      • Installation incorporation of goods into building
      • Jeweler, optician
    • * Not eligible for voluntary registration
  • Transitional Registration
    • Manufacturer who is liable to be registered is required to register before 1st September 2018
      • Registration commencement date will be on 1st September 2018
  • Automatic Registration
    • Manufacturers who are GST Registered Persons which have been identified and fulfilled the required criteria will be registered automatically as Registered Manufacturer under Sales Tax.
    • Registered Manufacturer need to charge tax beginning 1st September 2018
  • Persons Not Registered Automatically
    • GST registered person who fulfilled the required criteria to be registered but were not registered by 1st September 2018 need to apply for registration within 30 days from the commencement date.


b) SERVICE TAX
  • Threshold
NO. 1975 - MARCH 2015 1st SEPT 2018
ESTABLISHMENT THRESHOLD SERVICE PROVIDER TAXABLE SERVICES THRESHOLD
1. Hotel >25 rooms Accommodation: hotel, inns, lodging house, service apartment, homestay and any other similar establishment. All services including sale of food, drinks and tobacco products RM 500,000
2. Restaurant in hotel >25 rooms
  1. Operator of restaurant, bar, snack bar, canteen, coffee house or any place which provides food and drinks
    • eat-in or take-away
    • Exclude canteen in an educational institution or operated by a religious institution or body.
  2. Caterer
  3. Food court operator
All services including prepared or served food or drinks; and sale of tobacco products, alcoholic and non-alcoholic beverages RM 1,500,000
3. Restaurant in hotel <25 rooms and threshold exceed RM300,000
4. Restaurant outside hotel RM3,000,000
5. Night club No Threshold
  1. Night club, dance hall, cabaret
  2. First, second or third class public house or first or second class beer house
  3. Health or wellness center
  4. Massage parlor or similar places
All services including sale of food, drinks and tobacco products RM 500,000
6. Private club RM300,000 Private club All services including sale of food, drinks and tobacco products RM 500,000
7. Golf club and driving range No Threshold Golf club and driving range All services including sale of food, drinks and tobacco products RM 500,000
8. Private hospital (on ward and food charges only) RM300,000 Not taxable service
9. Insurance (B2B only) No Threshold Insurer or takaful operator
  1. General insurance or takaful B2B and general insurance or takaful B2C excluding medical
  2. Excludes
    1. Insuring or takaful coverage of risks relating to the transport of passengers or goods outside Malaysia
    2. Insuring or takaful coverage of risks incurred on granting credit relating to the export of goods, services or investments outside Malaysia
    3. Insurance contract or takaful certificate to cover risks outside Malaysia
RM 500,000
10. Telecommunication and Paid-TV Telecommunication and paid television service provider
  1. Telecommunication and related services excluding provisions of services to another Telco provider
  2. Paid television broadcasting services
RM 500,000
11. Customs agent Customs agent Services of clearing goods from customs control No Threshold
12. Advocates and solicitors Advocates, solicitors and syarie lawyers Legal services and other charges in connection to such services RM 500,000
13. Public accountant Public accountant Accounting, auditing, book keeping, consultancy or other professional services and other charges in connection to such services RM 500,000
14. Surveyors including registered valuers, appraisers or estate agents Surveyors including registered valuers, appraisers or estate agents Surveying services including valuation, appraisal, estate agency or professional consultancy services and other charges in connection to such services RM 500,000
15. Professional engineer Professional engineer Engineering consultancy or other professional services and other charges in connection to such services RM 500,000
16. Architect Architect Architectural services including professional consultancy services and other charges in connection to such services RM 500,000
17. Management services Management services excluding such services provided by:
  1. The developer, joint management body or management corporation to the owners of a building held under a strata title; or
  2. asset and fund managers
Management services and other charges in connection to the provision of management services including project management or project coordination RM 500,000
18. Consultancy Consultancy services excluding research and development companies Professional consultancy services and other charges in connection to such services excluding:
  1. Consultancy services relating to medical and surgical treatment provided by private clinics or specialist clinics; or
  2. Consultancy services in connection with goods or land outside Malaysia or where the subject matter relates to a country outside Malaysia
RM 500,000
19. Employment agency RM150,000 Employment agency Employment services excluding:
  1. Secondment of employees or supplying employees to work for another person for a period of time; or
  2. Employment outside Malaysia
RM 500,000
20. Private agency Private agency Provision of guards or the protection or security of person, property or business excluding such services to guard or protect the above which is situated outside Malaysia RM 500,000
21. Parking operator Parking operator Provision of parking spaces for motor vehicles where parking charges are imposed RM 500,000
22. Motor vehicles service or repair Operator of motor vehicle service or repair centre or provider of motor vehicle service or repair Provision of general servicing, engine repairs and tuning, changing, adjusting and fixing of parts, wheel balancing, wheel alignment or body repairs including knocking, welding or repainting of motor vehicles. RM 500,000
23. Courier service operator RM150,000 Courier service operator Courier delivery services for documents or parcels not exceeding 30 kilograms each excluding such services for documents or parcels:
  1. from a place outside Malaysia to a place outside Malaysia;
  2. from a place within Malaysia to a place outside Malaysia; or
  3. from a place outside Malaysia to a place within Malaysia and includes the provision of courier delivery services within Malaysia that forms parts of the service referred to in subparagraphs (ii) and (iii) where the service is provided by the same person
RM 500,000
24. Hire and drive car RM300,000 Hire-and-drive passenger motor vehicle and hire-passenger motor vehicle licensed by Land Public Transport Commission, Commercial Vehicles Licensing Board Act 1987 and Tourism Vehicles Licensing Act 1999 Provision of hire-and-drive or hire-passenger motor vehicle services including hire of passenger motor vehicle with or without chauffeur RM 500,000
25. Veterinary Not taxable service
26. Advertising Advertising Provisions of all advertising services excluding provision of such services for promotion outside Malaysia RM 500,000
27. Credit card or charge card services No Threshold Credit card or charge card services provider regulated by Bank Negara Malaysia Provision of credit card or charge card services through the issuance of a principal credit card, principal charge card, supplementary credit card or supplementary charge card, whether or not annual subscription or fee is imposed excluding fuel card and charge card in a closed community e.g. education institution or a sports club by its students or members No Threshold
28. Betting and gaming provider involving bettings, sweepstakes, lotteries, gaming machines or games of chance.
  1. Betting and gaming services involving bettings, sweepstakes, lotteries, gaming machines or games of chance.
  2. Conducting tournaments involving bettings, sweepstakes, lotteries, gaming machines or games of chance.
  3. Conducting or allowing the conduct of a card game or any other game by the casino operator.
RM 500,000
29. Transmission and distribution of electricity provider Provision of electricity to any domestic consumer excluding for the first 600 kWh for a minimum period of twenty-eight days per billing cycle consumed by that consumer RM 500,000
30. Airline operator licensed under section 35 of Malaysian Aviation Commission Act 2015 [Act 771] or air service permit under section 36 of Malaysian Aviation Commission Act 2015 Domestic passenger air transport service and all services in connection with such services excluding the air transport route as specified under the Rural Air Services Agreement RM 500,000
31. Information technology (IT) services provider All types of IT services excluding:
  1. Sale of goods in connection with the provision of IT services;
  2. IT services in connection with goods or land outside Malaysia or where the subject matter relates to a country outside Malaysia.
RM 500,000

  • The services provided by the service provider from number 12-17 excludes the said services if provided in connection with:
  1. goods or land outside Malaysia or where the subject matter relates to a country outside Malaysia; or
  2. any statutory fees paid to the government or statutory body

  • Rate of tax
    • Fixed at a rate of 6%.
    • Provision of credit card or charge card services
      • A specific rate of tax of RM 25 is imposed upon issuance of principal or supplementary card and every subsequent year or part thereof
  • Eligible from Registration
  • Determination of Turnover
    • Mandatory
      • Any person providing taxable services is liable to be registered if –
        • in the case the total amount of taxable services is prescribed, the total amount of taxable services provided by him in 12 months exceed threshold and the liability to be registered is at the following time whichever is the earlier:
    • Historical Method;
      • The total value of taxable goods in that month and the 11 months immediately preceding the month;
    • Future Method;
      • The total value of taxable goods in that month and the 11 months immediately succeeding the month.
        • In the case no amount of taxable services is prescribed, the liability to be registered is on the date of the commencement of the business.
  • Voluntary registration -
    • By application;
    • Provide taxable services;
      • The total amount of taxable services provided by him in 12 months is below threshold.
    • Subject to conditions determine by DG
  • Branch Registration is allowed for Service Tax.
  • Group Registration is not applicable
  • Transitional Registration
    • Taxable Service Provider who is liable to be registered is required to register before 1st September 2018
    • Registration effective date will be on 1st September 2018

  • Automatic Registration on 1st September 2018
    • Taxable Service Provider who are GST Registered Persons which have been identified and fulfilled the required criteria will be registered automatically as Registered Person under Service Tax.
    • Registration Person need to charge tax beginning 1st September 2018

  • Persons Not Registered Automatically
    • GST registered person who fulfilled the required criteria to be registered but were not registered by 1st September 2018 need to apply for registration within 30 days from the effective date.