Skip links

Malaysia Sales Tax on low-value B2C imported goods 2023; Service Tax on delivery services 2022

New budget promises extension of SST across e-commerce

In the 2022 National Budget, published on 29 October 2021, Malaysia extended its 6% Service Tax to delivery services.  Secondly, it will require sellers of imported goods not exceeding RM500 to charge 10% Sales Tax at the checkout or face border tax collections.

Want to receive our regular free updates? Regiser for our global VAT and GST news.

Sales Tax on imported e-commerce low value goods

From 1 January 2023, any online sellers to consumers of imported goods shipped by air not exceeding RM500 (approx €105; $120) will have to charge 10% Sales Tax in the checkout or be subject to import tax. Currently, such sales are exempt. Both resident sellers and foreign will be required to follow this new obligation – meaning non-resident tax registrations for foreign sellers. It is not yet clear how collections online will be coordinated with border control to prevent double taxation.

This follows the examples of shifting the import tax burden from the border customs control to the checkout in jurisdictions including Australia, New Zealand and the EU e-commerce package.

Service Tax on delivery services

From 1 July 2022, goods delivery service providers, including electronic platforms, will be required to charge 6% Service Tax. This will not include food delivery services.

Malaysia’s Sales Tax and Services Tax (SST)

Malaysia’s operates two main consumption taxes:

  • 10% Sales Tax (lower 5% on certain supplies such as Basic foodstuff; construction supplies; telecoms and IT; oil
  • 6% Service Tax. This included digital services provided by non-residents from January 2020.

SST was temporarily replaced by a Goods and Services Tax (GST) between April 2015 and September 2018.

Leave a comment