Updates on the Increase in Malaysia Service Tax Rate

Published on 23 Feb 2024.

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Following the Budget 2024 announcement, the prevailing Sales and Service Tax (SST) rate will increase from 6% to 8%, effective from 1 March 2024, on selected taxable services.

To ensure a smooth transition, the RAM Group will adopt the following approach:

1. SST of 6% applies to taxable services provided before 1 March 2024.
2. SST of 8% applies to taxable services provided on or after 1 March 2024.
3. For services extending over the effective date, the SST will be apportioned based on the service duration:

• Portion before the effective date – 6%
• Portion on or after the effective date – 8%

However, if the invoice is issued and the payment is completed before the effective date, the tax rate will remain at 6%.

Please note that the information provided is based on the transitional provisions issued by the Royal Malaysian Customs Department on 7 February 2024. The above positions may change once legislation or further guidance from the Government of Malaysia is released.

Should you have any questions or require further clarification, please do not hesitate to reach out to us. We deeply value our client relationships and are committed to ensuring a seamless transition through these changes.

Thank you for your continued trust and partnership.

 

Media contact
Chew Wei Li
(603) 3385 2499
weili@ram.com.my