Sales and Service Tax (SST) is administered by the Royal Malaysian Customs Department. MySST describes sales tax as a single-stage tax on imported and locally manufactured goods, and service tax as a tax charged on taxable services provided by a taxable person in Malaysia in the course and furtherance of business. Service tax is also imposed on imported taxable services.
Who needs to register
According to MySST, a person providing taxable services is liable to register if the total value of taxable services provided in 12 months exceeds the threshold. The MySST FAQ on the 2025 expansion shows that threshold values differ between service categories, and, for construction work services, that certain exemptions from payment do not remove taxable services from the registration-threshold calculation. A service provider should therefore test its own services against the current rules. MySST states that the standard taxable period is two months.
The 2025 scope expansion
The Ministry of Finance announced a targeted revision of sales tax and an expansion of the service tax scope effective 1 July 2025. The press release said sales tax at 5% or 10% would apply to discretionary and non-essential goods, and that the service tax scope would be expanded to include new services such as leasing or rental, construction and financial services, with targeted exemptions.
The detailed scope, rates and exemptions for each category are set out in the SST orders and the industry guides published on MySST. These can be amended, so they should be checked at the time a decision is made.
Overseas digital services raise separate questions; see our article on foreign SaaS and AI subscriptions.
Document the current service-scope review
Prepare a list of the actual services supplied, customers, contract terms, locations and relevant dates. Match each activity to the current category rules rather than applying one rate or threshold across all revenue. Keep the registration analysis, treatment of any exemption and supporting evidence with the review record.
Check the date of the applicable order and category guide. MySST’s industry-guide list includes 2026 updates for activities such as construction, management and information technology; the 2025 expansion remains historical context, not a complete statement of later amendments. Where the relevant category or relief is unclear, obtain a transaction-specific review before deciding how to charge or account for tax.
This article is general information only. Requirements depend on each business's circumstances; please refer to the official guidance on MySST, and see Saifudin & Co's tax advisory and compliance services if you would like assistance.