Malaysia SST Guide - Sales Tax & Service Tax Explained with Rates, Registration & Filing

SST in Malaysia

In Malaysia, the Goods and Services Tax (GST) was abolished in 2018 and replaced by the Sales and Service Tax (SST) regime. Unlike GST, which was a unified value-added tax system, SST is a single-stage tax composed of:

• 🛍️ Sales Tax – on manufactured and imported goods
• 🧾 Service Tax – on prescribed services provided by businesses

The SST is regulated by the Royal Malaysian Customs Department (RMCD).

📊 SST Rates in Malaysia

🔹 Sales Tax Rates

• 5% – on certain essential and raw goods
• 10% – standard rate for most taxable manufactured and imported goods
• Exempt – on certain food, medicines, and basic necessities

🔸 Service Tax Rate

• 8% – increased in March 2024 (previously 6%)
• Applies to specific taxable services such as hotels, restaurants, telecom, insurance, and digital services

🏢 SST Registration in Malaysia

📍 Threshold for Registration:

• Sales Tax: RM500,000 annual turnover for manufacturers
• Service Tax: RM500,000 annual turnover for service providers

Businesses exceeding this threshold must register with RMCD and charge SST accordingly.

🌍 Foreign Service Providers:

• Compulsory registration for digital services if annual revenue from Malaysian customers exceeds RM500,000
• Foreign suppliers must register through the MySST portal and charge 8% service tax on digital services

🔢 SST Number Format

The SST number is issued by RMCD upon registration and follows this format:

Example: W10-12345678

It’s required on invoices and return filings.

💻 SST on Digital Services

Since January 2020, foreign digital service providers must charge 8% service tax on:

• Streaming platforms (e.g., Netflix, Disney+)
• Online software (e.g., Microsoft 365, Zoom)
• E-books and online subscriptions
• Digital advertising (e.g., Google, Meta)

These providers must register under the Foreign Service Provider (FSP) category via MySST.

🧮 SST Calculation Example

For a local restaurant bill of RM 100:

• Service Tax @ 8% = RM 8
• Total = RM 108

For imported goods priced at RM 1,000 (subject to 10% sales tax):

• Sales Tax = RM 100
• Total = RM 1,100

🧾 Invoice Requirements under SST

Though not as strict as GST-era requirements, SST invoices must include:

• Supplier name and SST number
• Date of transaction
• Description of goods/services
• Amount and tax charged
• Total price including tax

📅 SST Return Filing

📝 Filing Details:

• Frequency: Bimonthly (every 2 months)
• Form SST-02: Used for both sales and service tax returns
• Submission Deadline: By the last day of the following month after the taxable period ends
• Platform: MySST portal

All returns and payments must be completed online.

🌐 Imports & Exports Under SST

📥 Imports:

Imported goods are subject to sales tax at the time of customs clearance.

📤 Exports:

Exported goods and services are not subject to SST, allowing businesses to remain competitive internationally.

🚫 SST Exemptions

The following are exempt from SST:

• Basic food items (e.g., rice, fresh vegetables)
• Public transport services
• Education and healthcare services
• Financial services
• Petrol and diesel

A full exemption list is provided by RMCD and is updated periodically.

💡 SST Compliance Tips

• ✅ Check if your goods or services are taxable under SST
• ✅ Register via MySST if you exceed the threshold
• ✅ Issue compliant invoices with SST details
• ✅ File SST-02 returns every 2 months
• ✅ Keep accurate records for 7 years as required by RMCD
• ✅ Foreign digital providers must register and collect 8% SST

Malaysia's SST system is designed to be simpler than the previous GST model. Whether you're a manufacturer, service provider, or foreign digital supplier, understanding your SST obligations is key to remaining compliant and avoiding penalties.

👉 Use our Malaysia SST Calculator at GSTCal.org to compute taxes accurately and instantly.