Malaysia Sales & Service Tax Changes Effective 1 July 2025 – Are You Ready?
Sales Tax: What’s Getting Taxed?
Sales tax applies to goods made or imported into Malaysia. From July 2025, many items previously tax-free will now be taxed at 5% or 10%.
| Category | Old Rate | New Rate |
|---|---|---|
|
Fruits, seafood, dried vegetables, books, rubber, wood |
0% |
5% |
|
Paper, racing bikes, artworks, helicopters |
0% |
10% |
|
Watches, lenses, safety glass |
5% |
10% |
Service Tax: New Categories Added
Service tax applies to certain services. Starting July 2025, more services will be taxed.
| Service Type | Tax Rate | Examples |
|---|---|---|
|
Rental/Leasing |
8% |
Office space, printers |
|
Construction Works |
6% |
Commercial buildings, infrastructure |
|
Financial Services |
8% |
Loan fees, card fees |
|
Private Healthcare |
6% |
Medical, TCM, physiotherapy |
|
Education |
6% |
Private & international schools |
|
Wellness & Beauty |
8% |
Massage, facial, spa, nail care |
Who Needs to Register?
| Service Type | Annual Sales Threshold |
|---|---|
|
Rental/Leasing |
RM500,000 |
|
Construction Works |
RM1,500,000 |
|
Financial Services |
RM500,000 (except cards: no threshold) |
|
Private Healthcare |
RM1,500,000 |
|
Education |
No threshold |
|
Wellness & Beauty |
RM1,500,000 |
What Should Businesses Do?
☑️ Check if you need to register
☑️ Update pricing, contracts & invoices
☑️ Inform customers of any price changes
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