Malaysia SST Guide for 2026: Sales & Service Tax Rates, Registration & Filing
Malaysia uses a Sales and Service Tax (SST), not VAT — sales tax at 5–10% and service tax at 8%. This guide explains registration thresholds, taxable scope, and how SST differs from the former GST.
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Key Takeaways
Malaysia doesn't levy VAT or GST — it runs a two-tier Sales and Service Tax (SST): Sales Tax on goods at 5% or 10%, and Service Tax on taxable services at 8% (6% for food and beverage, telecommunications, logistics, and several other sectors). A manufacturer registers for sales tax once annual taxable turnover exceeds RM500,000, and a service provider registers for service tax at the same threshold for its category. SaaS and other digital services to Malaysian consumers are taxable at 8% once the RM500,000 threshold is met; the SST base expanded on July 1, 2025 to cover financial services, leasing, construction, and private healthcare.
Taxability Snapshot
SaaS
Taxable (8%)
Digital Goods
Taxable
Sales Tax Rates
Malaysia does not levy a VAT or GST. It runs a two-tier Sales and Service Tax (SST): Sales Tax on goods at 5% or 10%, and Service Tax on taxable services at 8%, with a 6% band kept for food and beverage, telecommunications, logistics, parking, construction, healthcare, and education. The Royal Malaysian Customs Department (RMCD) administers SST through the MySST portal [1].
Rate | Applies to |
|---|---|
Service Tax 8% | Most taxable services, including foreign digital services |
Service Tax 6% | F&B, telecoms, logistics, parking, construction, healthcare, education |
Sales Tax 10% | Standard-rate goods |
Sales Tax 5% | Lower-band goods |
For more detail, see our APAC tax guides.
Registration & nexus threshold
Malaysia uses SST registration thresholds, not US-style economic nexus, and SST is a single-stage tax rather than a VAT. A manufacturer of taxable goods registers for sales tax once annual taxable turnover exceeds RM500,000, and a provider of taxable services registers for service tax at the threshold for its service category, generally RM500,000 [1][3]. Foreign digital service providers register under the Service Tax on Digital Services regime once digital-service sales to Malaysia exceed RM500,000 in any 12 months, then charge 8% [2][4]. Registration steps are in the How to Register section.
Filing frequency & deadlines
Foreign Registered Persons file quarterly, with the return and payment due by the last day of the month following each quarter. Domestic SST filers file bimonthly on Form SST-02, due the last day of the month following the taxable period [1][2].
Exemptions
Non-taxable services and goods outside the taxable schedules fall outside SST, and the 6% band applies to specified sectors. SaaS and other digital services supplied to Malaysian consumers are taxable at 8% once the RM 500,000 threshold is met. The SST base expanded on 1 July 2025 to cover financial services, leasing, construction, and private healthcare and education, with penalties enforced from 1 January 2026 [1][2].
Penalties
Late payment of service tax is penalized at 10% for the first 30 days, a further 15% for the second 30 days, and another 15% for the third — up to 40% of the tax due. Operating without registration carries additional fines under the Service Tax Act 2018 [1].
Sources
[1] Royal Malaysian Customs Department — Understanding SST (sales tax and service tax)
[3] Royal Malaysian Customs Department — Registering your business (MySST)
[4] Royal Malaysian Customs Department — Service Tax on Digital Services (MySToDS)
Verified July 2026 against Royal Malaysian Customs Department guidance.
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