The rate
The standard rate in Malaysia is 8%. Some goods and services carry reduced or zero rates and others are exempt. The difference matters: zero-rated sales still let you reclaim the tax on your purchases, exempt sales do not.
Service tax is 8% (6% for some services); sales tax on goods is 5% or 10%.
Who must register
There is no VAT. Two separate taxes, both administered by Customs on MySST. Sales tax: a manufacturer of taxable goods must register once the sale value of taxable goods passes RM500,000 in 12 months. Service tax: the threshold depends on which group of taxable services you provide. RM500,000 for accommodation, professional and consultancy services, IT, advertising, logistics, parking and most of the older groups; RM1,500,000 for food and beverage, construction work, and private healthcare, traditional medicine and allied health provided to non-citizens; RM1,000,000 for rental or leasing and for fee-based financial services; no threshold at all for education services, which catch private schools charging more than RM60,000 per student a year and higher education provided to non-citizens. Apply on MySST by the last day of the month after you cross the threshold; registration takes effect on the first day of the month after that, and you charge tax from then.
Filing and paying
Registered and filed with Royal Malaysian Customs Department.
One return, SST-02, covering both taxes, filed electronically on MySST every two months. It is due, with payment, by the last day of the month following the end of the taxable period, and must be filed even if no tax is payable. If you cease to be registered the final SST-02 is due within 30 days.
Penalties for getting it wrong
Late payment costs 10% of the tax for the first 30 days, a further 15% for the second 30 days and a further 15% for the third, capped at 40% after 90 days. An incorrect or incomplete return is an offence carrying a fine up to RM50,000 or three years' imprisonment, as is failing to keep records for seven years.