Malaysia SST Custom
Beginning from 1 September 2018, the Sales and Service Tax Malaysia, also known as SST Malaysia administered by the Royal Malaysian Customs Department (RMCD) will come into effect. The SST system is replacing the previous Goods and Services Tax (GST) which was implemented at a 6% rate in Malaysia.
The SST system is set to be much simpler, according to the Royal Malaysian Customs Department (RMCD). The upcoming SST’s proposed model will essentially be the same as the old SST system which was in effect before it was briefly replaced by the GST, but with some additional changes in place. For one thing, SST filing is going to be done electronically, where the old system had to be done manually.
The SST is known as a single-stage tax system, and under this system the sales ad valorem tax will be charged upon goods which are manufactured and sold by those who are taxable in Malaysia. Taxable goods which are imported into Malaysia will also be subjected to the SST.
What Are the Key Features of SST Malaysia?
All business in Malaysia will be required to register for SST if the taxable goods or services value of the business is going to exceed RM500,000 within a period of 12-months.
The scope of taxable services in Malaysia will include the following:
- Food and beverage preparation
- Insurance and Takaful
- Consultancy and management
- Legal and accounting services
- Surveying, valuation, architectural and engineering services
- Courier for forwarding services
- Security services
- Motor vehicle service and repairs
- Employment agencies
- Parking and car hire services
- Domestic flights
- Pay-TV services
- IT services
- Credit cards
- Advertising services
Non-taxable services include the following:
- Export services
- Import services
Manufacturing or import companies whose goods are not exempted under the upcoming SST system will be required to pay a sales tax of either 5% or 10%. However, the sales tax for petroleum is going to be different from the other taxable goods.
All business who are in the midst of their final GST returns must file it within 120 days from the date which the Goods and Services Tax Act 2014 has been repealed and ensure all input tax claims are included in the final returns. Business should immediately start preparing for the SST and begin by first determining if it fact your business operations are applicable for the SST.
Business who have already been previously registered with GST will be automatically registered if they fulfil the required criteria. Businesses which are not automatically registered will have to do so before 1 September 2018.
All SST returns must be submitted on a bi-monthly basis to the RMCD, and if you are a business entity that is registered with SST, you will be required to keep all relevant records of your SST submissions for at least 7-years. These records must be kept in either English or Bahasa Malaysia. Unless permitted by the Director General, all documents must be kept in Malaysia in either soft copy or hard copy.