Malaysia SST 2025 Made Easy for Businesses
Malaysia’s indirect tax system continues to evolve, especially with the updates to SST (Sales & Service Tax) in 2025. Whether you are running a local business or planning to expand into Malaysia, understanding SST is important for staying compliant and avoiding penalties.
What is SST?
Malaysia replaced GST with SST in September 2018. SST is made up of two taxes
- Sales Tax: Charged on goods that are manufactured in Malaysia or imported into the country.
- Service Tax: Charged on specific taxable services provided within Malaysia.
SST is managed by the Royal Malaysian Customs Department (RMCD).
Key SST Updates for 2025
Malaysia has introduced important changes to strengthen the tax system.
New Benefits
Imported fruits such as apples, oranges, mandarins, and dates are now exempt from sales tax.
Updated Registration Thresholds
For some services like leasing, rental, and financial services, the government has increased the SST registration limit.
Earlier, businesses had to register for SST when their yearly income crossed RM500,000. But now, starting in July 2025, these businesses only need to register for SST when their yearly income crosses RM1 million.
SST Registration Requirements
You must have to register for Sales Tax if your business earns more than RM500,000 (Approx USD 105,000) in one year
and if you are:
- manufacturer (making goods)
- importer (bringing goods into Malaysia)
- Subcontract manufacturer (doing work on goods for another company)
If your turnover is below RM500,000 (Approx USD 120,000), you do not need to register.
Service Tax Registration
General Services
If you provide services like restaurants, telecom, parking, etc., you must register when your yearly turnover reaches RM500,000 (Approx USD 120,000).
Special Services
Like leasing, Rental & Financial Services For these services, the limit is higher by RM1 million.
This means:
- If you do business in these services and earn less than RM1 million No SST registration is needed.
- If you do business in these services and earn RM1 million or more per yearYou must register for Service Tax.
SST Filing & Payment Deadlines
Businesses must file their SST returns every two months. Returns are due by the last day of the month after the two-month period.
Example: For January and February, the return must be submitted by 31 March.
Businesses must keep records for 7 years, in either English or Bahasa Malaysia.
What to keep:
- Sales and purchase (records of what you sold and bought)
- Invoices and receipts (bills and payment proof)
- Financial statements (profit/loss, balance sheets)
- Digital records (online records, software data)
- Business correspondence (emails, letters related to business)
Penalties for Not Following SST Rules
Malaysia is strict for Businesses that don’t follow SST rules can face penalties.
Late Payment Penalties:
First, late for 30 days: Pay 10% extra of the SST amount.
- Next Late 30 days later: Pay an additional 15%.
- Next Late 30 days after that: Pay another 15%.
(So, the longer you delay, the more you have to pay.)
You can also get penalties if you:
- Don’t register for SST when your business should
- File SST returns incorrectly
- Don’t submit SST returns at all
Pay your SST on time, register correctly, and file returns properly to avoid extra fines.
How to Stay Compliant
- Register for SST if your business meets the threshold.
- Charge and collect SST correctly on sales and services.
- File SST returns on time every 2 months.
- Keep proper records of all transactions (7 years or from business start).
- Respond promptly to any audits or RMCD inquiries.
How CSG Advisory Can Assist You
At CSG Advisory, we support businesses in establishing a smooth and hassle-free entry into Malaysia managing everything from company registration to complete SST compliance with precision and expertise. Our services include:
- We manage the full registration process, ensuring your business enters Malaysia smoothly and legally. All paperwork, compliance checks, and approvals are handled end-to-end, so you can start operations without delays.
- We provide professional nominee directors to help your company meet legal and regulatory needs. This director will not participate in, nor will they have any authority over the operations, management, decision-making, or financial activities of the business. Their role is purely administrative and limited to statutory compliance;
- We assist you with all filings and required documentation to ensure your company remains fully compliant with local laws and regulations.
- We assist in preparing documents and fulfilling all bank requirements for a secure business account.
- We will complete your Malaysia SST registration in accordance with the updated 2025 thresholds.
- Customized advice for new or growing businesses who wants to enter in Malaysia. Smooth operations process to ensure you get no penalties.
