How vat / sales tax works in Malaysia
Malaysia has no VAT or GST: single-stage sales tax at 10% or 5% applies to manufactured and imported goods, while service tax at 8% — 6% for food, telecoms, logistics, and care sectors — applies to defined services.
Manufacturers register past RM 500,000 of taxable goods turnover and service providers at their category threshold, with foreign digital sellers registering past RM 500,000 of Malaysian sales.
SST-02 returns run bimonthly through MySST, crypto platform services fall inside service-tax scope since August 2025, and exports and defined essentials escape the net.
Tax rates at a glance
- Sales and service tax
- 10% / 8%
- Sales tax goods
- 10% / 5%
- Service tax
- 8%
- Lower service band
- 6%
- Registration line
- RM 500,000
- Foreign digital sellers
- RM 500,000
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersSaaS foundersManufacturersExpatsCross-border traders
Watch out for
- Single-stage SST has no input-credit chain, so tax embeds in costs differently from VAT and cross-border comparisons mislead when treated as equivalents.
- Expanded service scope keeps adding categories, so previously untaxed services — including crypto platform fees — cross into charge without business-model changes.
- The 6% versus 8% service boundary splits food, telecoms, and logistics from general services, which needs category confirmation per supply.
- Foreign sellers past RM 500,000 must register as foreign persons and remit, with marketplace and platform collection mechanics layered on top.
Frequently asked questions
Does Malaysia have VAT or GST?
No. Malaysia runs SST in 2026: 10% or 5% sales tax on goods and 8% service tax, with 6% for defined food, telecom, logistics, and care services.
When must a Malaysian business register for SST?
Manufacturers past RM 500,000 of taxable goods turnover and service providers at their category threshold, generally RM 500,000, including foreign digital sellers.
Is SaaS taxable in Malaysia?
Yes. Digital services including SaaS supplied to Malaysian consumers carry 8% service tax once the provider crosses the registration line.