A foreign company can owe Malaysia’s Sales and Service Tax (SST) without a single office or employee in the country. The rules changed on 1 July 2025, when Malaysia’s Ministry of Finance expanded service tax to new categories and revised sales tax rates, per the Ministry of Finance press release. Registration is mandatory within 30 days of crossing the RM500,000 taxable-turnover threshold, through the MySST portal run by the Royal Malaysian Customs Department (RMCD).
Your registration path depends on what you sell. Foreign manufacturers and importers take the sales tax path. Service providers operating in Malaysia take the service tax path. Digital service providers register separately under Service Tax on Digital Services (SToDS). This 2026 guide covers all three.
What Is Malaysia Sales and Service Tax (SST)?
SST is a single-stage consumption tax that replaced Goods and Services Tax (GST) on 1 September 2018, governed by the Sales Tax Act 2018 and the Service Tax Act 2018 (Act 807). It is two separate taxes, not a value-added tax (VAT). There is no general input tax credit, so foreign companies cannot reclaim SST on inputs.
| Attribute | Sales Tax | Service Tax | Source |
|---|---|---|---|
| What it taxes | Taxable goods manufactured in or imported into Malaysia | Prescribed taxable services provided in Malaysia | Sales Tax Act 2018 / Service Tax Act 2018 |
| Who registers | Manufacturers and importers of taxable goods | Providers of prescribed taxable services | RMCD MySST |
| Stage | Single stage, at manufacture or import | Single stage, at point of service | RMCD MySST |
| Rate | 0%, 5%, or 10% | 8% standard since 1 March 2024; 6% for F&B, telecommunications, parking, logistics | Ministry of Finance |
| Number prefix | STN- | SST- | RMCD MySST |
| Legislation | Sales Tax Act 2018 | Service Tax Act 2018 (Act 807) | Attorney General’s Chambers |
For a plain-English primer, see Commenda’s guide to Malaysia’s SST.
Who Needs to Register for SST in Malaysia?
Any business, resident or foreign, must register once taxable turnover exceeds RM500,000 over a 12-month period, and RMCD requires the application within 30 days of becoming liable. The correct path differs by activity: foreign manufacturers and importers of goods, foreign providers of prescribed services in Malaysia, and foreign digital service providers each register through a different route.
| Foreign company type | Tax and regime | Registration path | Source |
|---|---|---|---|
| Manufacturer or importer of taxable goods | Sales tax | MySST portal | RMCD MySST |
| Provider of prescribed services in Malaysia | Service tax | MySST portal | RMCD MySST |
| Digital service provider to consumers | Service Tax on Digital Services (SToDS) | Foreign Registered Person (FRP) registration | RMCD MySToDS |
What Are the SST Registration Thresholds and Rates in Malaysia?
The standard threshold is RM500,000 over 12 months. Sales tax runs at 0%, 5%, or 10% on goods. Service tax is 8% for most services since 1 March 2024, with food and beverage (F&B), telecommunications, parking, and logistics kept at 6%, per Malaysia’s Ministry of Finance. Category-specific thresholds now apply to several services.
| Category | Registration threshold (12 months) | Rate | Effective | Source |
|---|---|---|---|---|
| Sales tax on taxable goods | RM500,000 | 0%, 5%, or 10% | — | Ministry of Finance |
| Standard taxable services | RM500,000 | 8% | 1 Mar 2024 | Service Tax Act 2018 |
| F&B, telecommunications, parking, logistics | RM500,000 | 6% | retained 1 Mar 2024 | Ministry of Finance |
| Specified service groups | RM1,500,000 | 8% | — | Service Tax Act 2018 (Act 807) |
| Construction work services | RM1,500,000 | 8% | 1 Jul 2025 | RMCD Construction guide |
| Leasing/rental and financial services | RM1,000,000 | 8% | 1 Jul 2025 | Ministry of Finance |
How do the historical and future threshold test methods work?
Malaysia tests the RM500,000 threshold two ways. The historical method counts taxable turnover in the current month plus the preceding 11 months. The future method counts the current month plus expected turnover over the next 11 months. A company projecting a breach under the future method must register within 30 days of that month, not after crossing.
| Method | What it counts | When you must register | Source |
|---|---|---|---|
| Historical | Current month + preceding 11 months | Within 30 days of exceeding RM500,000 | RMCD MySST |
| Future | Current month + expected next 11 months | Within 30 days of the month you anticipate crossing | RMCD MySST |
What Changed in the 2025 SST Expansion?
Since 1 July 2025, service tax scope covers new categories: leasing or rental, construction, financial services, private healthcare, private education, and beauty services, alongside revised sales tax rates on non-essential goods, per the Ministry of Finance. A grace period gave no prosecution or penalties for good-faith efforts through 31 December 2025.
| New category | Rate | Threshold (12 months) | Effective | Notable revision | Source |
|---|---|---|---|---|---|
| Leasing or rental | 8% | RM1,000,000 | 1 Jul 2025 | Raised from RM500,000; residential and small-business exemptions | MoF revision |
| Construction work | 8% | RM1,500,000 | 1 Jul 2025 | Excludes residential buildings | RMCD Construction guide |
| Financial services | 8% | RM1,000,000 | 1 Jul 2025 | Raised from RM500,000 | MoF revision |
| Private healthcare | 8% | Set by RMCD order | 1 Jul 2025 | Targets non-citizen and high-fee segments | Ministry of Finance |
| Private education | 8% | Set by RMCD order | 1 Jul 2025 | — | Ministry of Finance |
| Beauty services | 8% | Set by RMCD order | 1 Jul 2025 | Revised after public pushback | Ministry of Finance |
The grace period ended 31 December 2025, per the Ministry of Finance, so enforcement is now live in 2026.
Do Foreign Digital Service Providers Register Under SToDS Instead?
Yes. Foreign providers of digital services to Malaysian consumers register as a Foreign Registered Person (FRP) under Service Tax on Digital Services (SToDS), not the standard MySST flow, once digital sales to Malaysia exceed RM500,000 in 12 months, per RMCD’s MySToDS. This has applied since 1 January 2020. The taxable period is quarterly.
For business-to-business (B2B) supplies, the Malaysian recipient self-accounts for imported taxable services under a reverse charge, which can remove a B2B-only seller’s registration duty. The digital service tax rate rose from 6% to 8% on 1 March 2024, under section 56B of the Service Tax Act 2018.
What Nexus Tests Determine SST Obligations for Foreign Companies?
Three nexus tests apply. Sales tax nexus arises from manufacturing taxable goods in Malaysia or importing them into Malaysia. Service tax nexus arises from providing prescribed taxable services in Malaysia. SToDS nexus arises from supplying digital services to Malaysian consumers above threshold, regardless of physical presence. Malaysia uses a positive list, so only listed services are taxable.
How to Register for SST in Malaysia: Step-by-Step
Registration is free and done online through the MySST portal for sales and service tax, or through MySToDS for FRPs. RMCD reviews the application, then issues the SST number and effective date by email. Digital service providers use the FRP path, not the standard flow.
- Go to the MySST portal at https://mysst.customs.gov.my.
- First-time users select New Registration.
- Choose Sales Tax, Service Tax, or both.
- Enter your Business Registration Number (BRN) and business details.
- Enter turnover to confirm the threshold.
- Upload the required documents and submit.
- RMCD reviews the application, then emails your SST number and effective date.
Foreign digital service providers skip this flow and register as an FRP through MySToDS instead.
What Documents Do Foreign Companies Need for SST Registration?
The core checklist is a business registration certificate, financial statements evidencing turnover, director or owner identification, and bank account details. Local entities use their SSM (Companies Commission of Malaysia) certificate; foreign applicants provide home-country incorporation documents. Foreign applicants without a Malaysian BRN provide home-country identifiers, so confirm the exact FRP requirements with RMCD.
- Business registration certificate (SSM for local entities; incorporation documents for foreign applicants)
- Financial statements substantiating the RM500,000 threshold
- Director or owner identity card or passport
- Bank account details for payments and refunds
How Long Does SST Registration Take and What Does It Cost?
There is no government registration fee. Processing time depends on applicant type. GST-registered businesses were auto-migrated on 1 September 2018 in about 24 hours. New and non-resident applicants register with effect from the first day of the month after their application. Professional fees are the only cost, and only if you engage an agent.
| Applicant profile | Timeline | Cost | Source |
|---|---|---|---|
| GST-registered (2018 migration) | ~24 hours (historical) | None | RMCD (1 Sep 2018) |
| New domestic applicant | Effective 1st of month after application | None | RMCD MySST |
| Non-resident / FRP applicant | Effective 1st of month after application | None; agent fees optional | RMCD MySToDS |
Do Foreign Companies Need a Fiscal Representative in Malaysia?
Appointment is not always mandatory. Many non-resident businesses appoint a local agent for practical compliance, and an appointed representative can be held jointly liable for tax obligations. Under SToDS, a Foreign Registered Person registers directly and is not required to appoint a local agent.
Malaysia does not impose a general bond or bank guarantee on non-resident SST registrants. Where RMCD requires security, it is limited to specific risk-based cases, not applied by default to foreign registrants.
Can Foreign Companies Register for SST Voluntarily?
Yes. Businesses below the RM500,000 threshold can apply for voluntary registration, and once registered they carry full charging, filing, and record-keeping obligations. Registration can unblock marketplace onboarding, since platforms vet SST status before listing sellers, and it smooths customs clearance for importers. Because SST has no input tax credit, registration adds compliance cost without VAT-style recovery.
What Is the Malaysia SST Number Format?
Sales tax registrants receive STN-YYMM-XXXXXXXX, for example STN-2301-12345678. Service tax registrants receive SST-YYMM-XXXXXXXX. The YYMM segment is the registration year and month, and the suffix is an 8-digit sequence. Common errors are a missing prefix, the wrong digit length, and a malformed date segment.
You can check any number on the MySST portal. See Commenda’s Malaysia SST verification guide for the step-by-step lookup after registration.
What Are the Post-Registration Obligations for SST in Malaysia?
Registered businesses file the SST-02 return bi-monthly, every two months, and pay by the last day of the month following the taxable period. FRPs file quarterly. Keep records for 7 years. Comply with Malaysia’s phased e-invoicing mandate, run by LHDN (Inland Revenue Board) through its MyInvois system, which rolls out by annual turnover band.
Can Non-Resident Companies Claim SST Refunds?
No. SST is single-stage with no general input tax credit, so foreign companies cannot reclaim SST on inputs the way they reclaim VAT or GST. Narrow carve-outs exist: foreign missions and international organizations can claim service tax refunds for official use, and specific relief schemes recover or suspend sales tax for qualifying businesses.
To claim an eligible refund, applicants submit the relevant application form, original invoices showing the service tax charged, and bank account details. Common rejection reasons are incomplete invoices, non-eligible services, and missing documents.
What Special Schemes Reduce SST Costs for Foreign Businesses?
The Approved Major Exporter Scheme (AMES) lets qualifying manufacturers and traders acquire or import goods without paying sales tax up front. The Approved Trader Scheme (ATS) suspends sales tax on imports for approved traders, easing cash flow for re-exporters. Both require RMCD approval against eligibility criteria. Malaysia’s licensed and bonded warehouse provisions offer further duty suspension for qualifying goods.
What Are the Penalties for Late SST Registration or Non-Compliance?
Late registration, non-filing, and non-payment each carry fines up to RM50,000, imprisonment up to 3 years, or both, under the Sales Tax Act 2018 and Service Tax Act 2018. Late payment adds escalating surcharges on outstanding tax. The 2025 grace period ended 31 December 2025, so enforcement is now live.
| Offence | Penalty | Statutory basis | Source |
|---|---|---|---|
| Failure to register | Fine up to RM50,000, up to 3 years imprisonment, or both | Sales/Service Tax Act 2018 | RMCD |
| Non-submission of returns | Fine up to RM50,000, up to 3 years imprisonment, or both | Sales/Service Tax Act 2018 | RMCD |
| Non-payment of tax | Fine up to RM50,000, up to 3 years imprisonment, or both | Sales/Service Tax Act 2018 | RMCD |
| Late payment | 10% after first 30 days, +15% after second 30 days, +15% after third 30 days | RMCD penalty schedule | RMCD Penalties |
How Do You Update or Deregister an SST Registration?
Two cases apply. To change registration details such as address, contact, or business particulars, log in to the MySST portal and update your profile, keeping the same number. To deregister when you cease taxable activities or fall below RM500,000, notify RMCD in writing within 30 days. Keep charging SST and filing returns until cancellation is approved. A new legal entity or changed BRN needs a fresh registration.
How Commenda Helps With SST Registration in Malaysia
Foreign companies must register within 30 days of crossing RM500,000, on the path that matches their activity, and the 2025 expansion widened who is caught. Commenda’s global indirect tax software tracks registration obligations, thresholds, and filing deadlines across jurisdictions including Malaysia, and Commenda’s team handles SST registration and ongoing filings for non-resident businesses.
Use Commenda’s Malaysia SST verification guide to confirm a number after registration, and the compliance calendar to track your bi-monthly SST-02 deadlines. Book a demo to get a free assessment of your Malaysia SST registration obligations.
