Short answer. You must register if you manufacture taxable goods or provide taxable services in Malaysia and your 12-month taxable value passes the threshold for your category on the Customs MySST page. Sales tax falls mainly on manufacturers and on imports of taxable goods, while service tax falls on services in Customs’ taxable groups. Legal form does not matter, so a Sdn Bhd, sole proprietor and partnership are treated alike.
Axecta provides sst registration and returns for companies across Malaysia. Talk to our team.
In this article
- Start with the activity, not the company type
- Sales tax: who has to register
- Service tax: who has to register
- Activity-by-activity examples
- Illustrative scenario: a mixed business
- Who is not required to register
- Imported services and overseas providers
- What this means for different structures
- Common mistakes
- How Axecta helps
- Next steps
- Frequently asked questions
Start with the activity, not the company type
SST attaches to what a business does, not how it is incorporated. A Sdn Bhd, a sole proprietor and a partnership are all treated the same if they carry on a taxable activity above the threshold. The Customs registering business page frames registration around two questions: do you manufacture taxable goods, and do you provide a service on the taxable service lists? If the answer to both is no, SST registration is generally not required, although imported services can still bring a tax obligation (see below).
Sales tax: who has to register
The understanding SST page describes sales tax as a single-stage tax on imported and locally made goods, charged either at import or when a manufacturer sells or otherwise disposes of the goods. Two groups are involved:
- Manufacturers of taxable goods. Registration is required once the sales value of taxable goods exceeds RM500,000 over 12 months. The same figure applies to sub-contract work on taxable goods.
- Importers. Sales tax on imported goods is collected at the border by Customs, so an importer does not register in order to charge it onwards in the same way a manufacturer does.
A business that only buys and resells goods locally is generally not the party charging sales tax. The tax has already been built into the price at the manufacturing or import stage.
Customs’ sales tax FAQ gives the rates as 5 percent, 10 percent or a specific rate, depending on the goods. It also lists three exemption routes: goods exempted by the Sales Tax (Goods Exempted From Sales Tax) Order 2018, specified classes of person under Schedule A, and relief on raw materials, components and packaging under Schedules B and C for registered manufacturers. Certain activities such as tailoring, jewellery, optical work and engraving are exempt from registration regardless of turnover.
Service tax: who has to register
Need this done for you? Axecta’s sst registration and returns team can handle this for your company. See the sst registration and returns service.
Service tax applies to taxable services provided in Malaysia in the course of business, and to imported taxable services. A service provider registers when the value of taxable services in a 12-month period exceeds the threshold for the group. The service tax FAQ states that most taxable services are charged at 8 percent, with food and beverage, logistics, telecommunications and parking at 6 percent and credit or charge card services at RM25 per card. The 8 percent rate took effect on 1 March 2024.
Groups on the Customs registration page
| Group | Examples | Threshold shown |
|---|---|---|
| Accommodation | Hotels, serviced stays | RM500,000 |
| Food and beverage | Restaurants, cafes, caterers | RM1,500,000 |
| Clubs, health and entertainment | Night clubs, massage parlours, karaoke, private clubs, golf, betting and gaming | RM500,000 |
| Professional and business services | Advocates and solicitors, public accountants, surveyors, engineers, architects, consultants, IT providers | RM500,000 shown for advocates and solicitors; confirm for other professionals |
| Insurance and parking | Insurance and takaful, parking space operators | RM500,000 |
| Logistics | Logistics, courier, e-commerce logistics, forwarding agents | RM500,000 shown for logistics; forwarding agents have no threshold |
| Credit and charge cards | Card issuers | No threshold |
Services added from 2025
Customs’ FAQ on the 2025 service tax expansion adds private healthcare, construction work, private education, rental or leasing, financial services and beauty treatment. For each it lists its own exclusions. For example, residential property is excluded from rental or leasing, residential building construction is excluded from construction work, and interest or spread charges are excluded from financial services. Thresholds listed on that page were RM1,500,000 for private healthcare and above RM1,500,000 for construction, RM500,000 for rental or leasing and beauty treatment, and above RM500,000 for financial services. Private education is tied to schools charging over RM60,000 per student per academic year. Some secondary sources report a higher threshold for rental, leasing and financial services, which we could not confirm on the official page, so verify with the Service Tax Policy page.
Activity-by-activity examples
| Business | Likely position | What to check |
|---|---|---|
| Factory making taxable goods | Sales tax once taxable sales pass RM500,000 | Whether the goods are taxable or on the exempt order |
| Cafe or restaurant | Service tax, food and beverage group | RM1,500,000 threshold, 6 percent rate |
| Accounting, legal or engineering practice | Service tax, professional services | Threshold row for your exact service |
| IT or consulting firm | Service tax, if the service is on the list | Customs’ IT services guide and the threshold row |
| Logistics operator or freight forwarder | Service tax, logistics group | Forwarding agents have no threshold |
| Landlord of commercial space | Possibly service tax, rental or leasing | Residential exclusion and the threshold |
| Trading company buying and reselling locally | Generally no SST on its own sales | Whether it also provides a taxable service |
| Online seller of goods | Depends on whether it manufactures, imports or provides a listed service | Customs’ guides on low value goods and digital services |
This is a starting point. Customs’ published lists, orders and guides decide.
Illustrative scenario: a mixed business
A Sdn Bhd runs a small print shop in Shah Alam. It prints marketing materials (a manufacturing activity) and also offers design consultancy (a service). It has RM300,000 in print sales and RM450,000 in design fees over the last 12 months. Each activity is tested separately: print against the sales tax threshold of RM500,000 and design against whatever row applies to its service. Neither total is above RM500,000, so neither test is triggered on these round, invented numbers. If print sales grew to RM520,000 while design stayed at RM450,000, the company would have to register for sales tax but would still be assessed separately on the service side. Only the manufacturing side would carry sales tax invoices at that point.
Who is not required to register
- Manufacturers of non-taxable goods, who cannot register for sales tax.
- Manufacturers and service providers below the threshold for their category, unless they register voluntarily.
- Businesses whose activities fall outside the taxable service lists, such as a purely local trading or retail business.
- Services supplied within a Designated Area or Special Area (for example Labuan, Langkawi, Tioman, Pangkor, a Free Zone or a Licensed Warehouse), which are generally not subject to service tax unless the Minister prescribes otherwise, according to the service tax FAQ.
Imported services and overseas providers
The understanding SST page says service tax also applies to imported taxable services, due at the earlier of payment or receipt of the invoice. Customs provides a separate non-registrant route on MySST for imported services. If your company buys taxable services from overseas providers, for example consulting or software services, ask whether the imported-services rules apply, even though you do not provide taxable services yourself.
What this means for different structures
- Sdn Bhd: registration is per legal entity and group registration is not allowed. A holding company with two operating subsidiaries tests each one.
- Sole proprietor or partnership: the same thresholds apply. Registering under a business name does not change the analysis.
- Foreign-owned company with a Malaysian subsidiary: the subsidiary is tested on its own Malaysian taxable activity. The foreign parent’s other sales do not count.
- Branches: branch registration is allowed, according to the registering business page.
Common mistakes
- Assuming “we are a services company, so SST does not apply” without reading the group lists.
- Assuming one threshold applies to everything instead of per category.
- Forgetting the 2025 expansion groups, especially rental, construction and healthcare.
- Charging SST on invoices before the SST number is issued.
- Treating exempt customers or exempt goods as if everything is exempt.
- Overlooking imported services.
How Axecta helps
Axecta’s tax team reads your invoices and contracts against the Customs lists, writes a short registration memo for the file, submits the MySST application when needed and sets up your bimonthly return calendar. Where you are close to a threshold we set up the rolling test described in the SST threshold guide. See our SST registration and returns service, and our overview of tax obligations by business type.
Next steps
- List each product and service line you sell and mark whether it is goods you make, goods you resell or a service.
- Match each service against the Customs group lists and the 2025 expansion FAQ.
- Test the rolling 12-month value against the threshold.
- If you must register, apply through MySST and read how to file the SST return before your first period.
- Keep your bookkeeping in a shape that can support the return. See outsourced accounting services if you need help.
Frequently asked questions
Does a Sdn Bhd register for SST differently from a sole proprietor?
No. SST depends on the activity and the 12-month value, not the legal form. Both register through MySST using the same thresholds. The difference is practical: a company must register as its own entity, because Customs states that group registration is not applicable, while branches may be registered.
Do consultants and accountants have to register for service tax?
Professional and business services such as accountants, advocates, engineers, architects, consultants and IT providers appear on the Customs service groups. Customs shows RM500,000 for advocates and solicitors, and other professional rows should be confirmed on the page. Check your specific service line before registering.
Does a restaurant need to register for SST?
Food and beverage services are taxable once value exceeds RM1,500,000 over 12 months, according to the Customs page. The rate is 6 percent. Below that value, a restaurant is not required to register but may apply voluntarily.
Do online sellers have to register for SST?
It depends on what is sold. A seller that manufactures taxable goods may fall under sales tax. A reseller of local goods generally does not charge sales tax. Platforms and digital services have separate rules, so read Customs’ guides for your model before deciding.
Are landlords subject to service tax?
From 1 July 2025 rental or leasing services are among the added categories. The FAQ excludes residential property and lists a RM500,000 threshold at 8 percent. Secondary sources report a higher threshold, so confirm the current position on the Customs policy papers.
Do I pay service tax on services bought from overseas?
Customs states that service tax also applies to imported taxable services and offers a separate non-registrant route on MySST. The tax is due at the earlier of payment or receipt of the invoice. Check whether your purchase is a taxable service. Axecta can review your payments.
What are the sales tax rates?
Customs states the sales tax rate is 5 percent, 10 percent or a specific rate, depending on the goods. Some goods are exempt under the Sales Tax (Goods Exempted From Sales Tax) Order 2018. Check the order for your goods.
Can I register for SST if I am below the threshold?
By application, subject to conditions set by the Director General. For sales tax, only manufacturers of taxable goods are eligible. Once registered you must charge SST and file every period, including nil periods, so weigh the workload first.
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Keep reading
- SST Registration Threshold in Malaysia: The Limits, the 12-Month Test and What to Do
- Sales Tax vs Service Tax in Malaysia: Differences, Rates and Which One Applies
- How to File an SST Return on MySST (Form SST-02): Deadlines, Steps and Payment
- Tax Obligations by Business Type in Malaysia
- Outsourced Accounting Services in Malaysia: What Is Included?
- SST Late Filing and Payment Penalties in Malaysia: Rates, Offences and How to Fix a Miss
- Sales & Service Tax (SST): the full guide
Official sources to check
- Royal Malaysian Customs Department (MySST)
- MySST registering business page
- MySST FAQ for sales tax, service tax and 2025 expansion
This article is general information and not legal, tax or accounting advice for your company. Rates, thresholds, deadlines and procedures change, so confirm current requirements with the sources above or with Axecta.