(Tax Update) What is the new SST rate in Malaysia 1 March 2024?

(Tax Update) What is the new SST rate in Malaysia 1 March 2024?

In this blog, we discuss the service tax rate will increase from 6% to 8% on all taxable services with effect from 1 March 2024, except for F&B, telecommunication services, vehicle parking space services and logistic services.

The scope of service tax will also be widened to include karaoke centre services, delivery services, brokerage and underwriting services, as well as logistics services, effective 1 March 2024.

Key Summary

Service Tax Rate Increase

  • Starting from 1 March 2024, the service tax rate will go up to 8%.

  • Some services like food, beverages, telecom, parking, and logistics will still be taxed at 6%.

  • Credit card fees will stay at RM25 per card per year.

  • Other services like accommodation, clubs, and professional services will be taxed at 8%.

Transition Rules for the Tax Increase:

  • Services provided before 1 March 2024, will be taxed at 6%, but services after that date will be taxed at 8%.

  • If a service spans 1 March 2024, part of it will be taxed at 6% and the rest at 8%.

  • Payments made before 1 March 2024, for services after that date will be taxed at 6% if provided within six months, and 8% if provided after six months.

  • Special rules will apply to businesses offering services taxed at different rates.

Expansion of Taxable Services:

  • New services like karaoke centers, brokerage, and logistics will be taxed.

  • Logistics services involve managing the movement and storage of goods and information efficiently.

  • Some services like food delivery and transshipment won't be taxed.

  • Businesses providing logistics services to other businesses will be exempt from tax.

Overall, these changes could affect how much tax businesses and consumers pay for certain services in Malaysia.

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