Malaysia to Implement Sales Tax on Low Value Goods Starting 1 January 2023
Malaysia will implement sales tax on low value goods (LVG) beginning 1 January 2023. This will be imposed effectively from 1 April 2023. This was announced by the Royal Malaysian Customs Department (RMCD).
The relevant laws pertaining to the sales tax are available on RMCD. Anyone who wishes to access the details can do it via the MySST portal.
What Are Low Value Goods (LVG)?
LVG products are goods available outside Malaysia that are sold for no more than the prescribed amount. These goods must be brought to Malaysia via the prescribed manner.
This means that LVG goods should only be brought into Malaysia through sea, air, or land methods. They should sell in Malaysia for no more than RM500 to be classified as LVG.
Anyone who sells LVG products in store or online will be subject to the new LVG sales tax. Sellers must register for the sales tax. You will be liable for taxes if the total sale value of your LVG goods is projected to exceed RM500,000 in a year.
How to Register for the LVG Sales Tax?
Registrations can be done online via the MyLVG system. Once registered, all sellers must issue invoices with details pertaining to the sale of LVG goods. The invoices must contain the customer’s prescribed details.
How Much Will the Sales Tax Be?
The rate of the tax is 10% of LVG products with a few exemptions. These include tobacco and cigarette products, intoxicating liquor, pipes, and electronic cigarettes.
The new sales tax will be charged on the value of the sale. This excludes the cost of transportation, insurance, tax or duties that are payable and chargeable on the LVG’s sale.
Taxes Have You Confused? That’s Why We’re Here
Any form of tax (new or old) can be challenging for any business. With so many details to attend to, it can be easy to overlook a crucial piece of information. That is why we are here to help make your job easier.
Get in touch with our expert tax professionals. We’ll guide you through your sales process and make sure your compliance requirements are met on time, everytime.