Malaysia is increasing its focus on indirect taxes as part of broader efforts to strengthen tax governance and revenue collection. The re-introduction of Sales Tax and Service Tax (SST), replacing the former Goods and Services Tax (GST), has fundamentally changed how businesses manage indirect tax obligations.

Unlike GST, SST operates as a single-stage tax with limited recovery mechanisms, making it a direct cost to businesses in many cases. Service tax applies only to prescribed taxable services, while sales tax applies to selected goods manufactured locally or imported into Malaysia. As a result, correct classification of goods and services, registration assessment, and accurate reporting have become critical to managing exposure and avoiding underpayment risks.

With ongoing changes to scope, exemptions, and enforcement focus by the Royal Malaysian Customs Department (RMCD), businesses face increased compliance complexity. Errors in classification, registration, or documentation can lead to assessments, penalties, and disputes. Proactive indirect tax compliance and advisory support is therefore essential to manage risk, control costs, and maintain operational certainty.

Sales Tax and Service Tax

Classifying taxable goods and services is not always straightforward. Businesses must manage their exposure to Sales Tax and Service Tax (SST) carefully to ensure correct registration, reporting, and treatment of transactions, particularly during RMCD audits and reviews.

Our services include:

• Registration for sales tax and/or service tax
• Review of sales tax and service tax returns
• Health checks
• Retainer services
• Advisory services pertaining to sales and goods and services tax implications for business activities and/or specific transactions
• Managing customs audits
• Managing customs ruling applications

 

Customs Duties

Businesses can incur significant compliance and administrative costs when dealing with the Royal Malaysian Customs Department (RMCD) for import and export declarations. Correct transaction structuring, including classification, valuation, and duty treatment, helps reduce cost leakage and mitigate audit and penalty risks.

Our services include:

• Applications for indirect tax exemption and refund, tariff classification and trade facilitation arrangements
• Reviewing of agreements, transactions, voluntary declarations, etc.
• Customs valuation and transfer pricing reviews
• Managing customs audits and investigations
• Making representations to RMCD for rulings and dispute resolutions

Our Indirect Tax team works closely with businesses to manage Sales Tax, Service Tax, and customs compliance effectively while addressing potential risks and exposures. Speak to us to understand how we can support your indirect tax compliance and advisory needs today.