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Understanding Malaysia’s Sales and Service Tax (SST)
Sales and Service Tax (commonly known as SST) is the new tax in Malaysia that was implemented on 1 September 2018. It replaced the Goods and Services Tax (GST), which was levied as the sole revenue collection mechanism in Malaysia.
Although SST is different from GST in various aspects, there are still numerous similarities between these two. However, the number of products or goods exempted via sales and services tax is more than those that were exempted through the GST.
With a view to assist you to learn more about the sales and services tax, we have compiled this comprehensive guide. It will help you to understand how SST works, how to register, and some other essential aspects associated with the sales and services tax.
What is SST Rate in Malaysia?
Following are the SST Malaysia rates applicable to different goods and services
| Rate | Type | Which goods or services |
| 10% | Standard | The goods are charged with SST throughout the process or chain of B2B. This kind of tax isn’t deductible by the taxpayer. |
| 6% | Standard | The sales and service tax is also applicable on the services. It is only due when the services are offered to the non-tax registered final consumer. These services include hotels and accommodation, restaurants, car repair & rental services, insurance, domestic flights, credit cards, business consulting, legal/accounting services, telecoms, electricity. |
| 5% | Reduced | SST Malaysia rates are less for goods like petroleum oils, construction materials, telecommunications, foodstuffs, IT, and printing materials and hardware. |
Who Pays SST in Malaysia?
The local or international businesses performing their activities in Malaysia are bound to pay SST if they exceed a specific annual income threshold. At present, this threshold is set at a figure of RM500,000.
Businesses already registered with the GST don’t need to register again for the sales and services tax. This is so, as their data will be transferred to create the SST Malaysia registration. The overall process of registration is simple as it is an online procedure.
If you are confused about how and where these tax rules will be applied, don’t worry! We, as a top audit firm in Kuala Lumpur, can provide you best taxation advisory services for GST and SST in Malaysia.
What does SST stand for?
SST is an abbreviated term for “Sales and Services Tax”, which is a new tax collection system introduced in Malaysia. It’s a single-stage tax that is levied on all types of taxable goods being manufactured and sold within the country.
If the products or goods are taxable, SST is levied on them irrespective of whether a Malaysian registered manufacturer has manufactured these goods or has been imported.
However, there are various products or goods exempted from sales and service tax. These goods are listed in the “Sales Tax Exemption Order”.
How Can I Apply for SST in Malaysia?
Business owners can apply for SST Malaysia registration through an online portal named MySST. The prevailing businesses that are registered under GST would be automatically registered under SST.
Such business owners will receive a letter/email from the concerned authorities, notifying them that they are now liable to pay tax under the sales and services tax system. The SST Malaysia registration or application process is carried out online via MySST system.
