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16 Aug 2021

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Malaysia Sales and Service Tax (SST): What do SMEs need to know about it?

On 1st September 2018, the netizens of Malaysia witnessed the end of the Goods and Services Tax (GST) system. Since then, the Sales and Service Tax (SST)  has been taking the lead. As the backbone of the country, what do small and medium enterprise (SME) owners ought to know about SST? Let’s uncover it bit by bit.

 

What is SST?

Sales and Service Tax (SST) is a tax charged and levied on taxable services provided by the taxable person. However, SST works separately as Sales Tax and Service Tax.  

Sales Tax: A single tax levied on imported and locally made goods. It is either imposed during the time of importation or goods’ disposal or sales. 

Service Tax: A tax charged and levied on taxable services provided by a taxable individual in Malaysia.

 

Differences between Sales and Service Tax

Sales Tax Service Tax
Rate Exempted, 5% or 10% (Please refer here 6%
Applicable to  

  • Taxable goods made in Malaysia, levied during sold, or disposed of;
  • Taxable goods imported into Malaysia.
Taxable services provided in Malaysia by a registered person with his business
Not Applicable to Goods listed under Proposed Sales Tax (Goods Exempted from Sales Tax) Order;

Certain manufacturing activities are exempted by the Minister of Finance through the Proposed Sales Tax (Exemption from Registration) Order.

Imported Services
Who and When do I need to register? A manufacturer that manufactures taxable goods and:

  • If sales threshold reached RM 500,000.00 for Manufacturer and Subcontractor in the past 12 months;

NOTE: It is mandatory for some companies to be registered, while some can choose to be voluntarily registered.

Any person that provides taxable services has to be registered if the total amount of taxable services provided in 12 months exceeds the threshold.

F&B – RM1.5 million

Credit Card, Freight Forwarder – No threshold

Other Services – RM500,000

When is it payable? Accrual basis

  • When the goods are sold, disposed of, or first used
Payment basis

  • When payment is received for the taxable services rendered
Payment  Bimonthly Bimonthly

 

How to register?

You need to register your business through the MySST website

Even though your business is exempted from Sales Tax under Sales Tax (Persons Exempted from Payment of Tax) Order 2018, an application for exemption is needed to be made through the MySST website.

 

How to file the SST return?

You can either get it done online via CJP system or download Form SST-02 and post it to the Customs Processing Centre (CPC).

 

How to pay SST?

You can make the payment via CJP system, but there is an RM100 million transaction limit for a corporate bank account and RM100k for an individual bank account.

If you don’t prefer online banking, you can make the payment by cheque or bank draft payable to ‘Ketua Pengarah Kastam Malaysia’ and mail it to the CPC.

 

Doesn’t it sound tedious for you? Need any help with SST registration? CORPSO makes sure your SST registration is smooth like butter!

 

For further and detailed info about SST: https://mysst.customs.gov.my/FAQServicesTax