Malaysia SST: Sales Tax, Service Tax, the 8% Rate & Registration
"SST" is not one tax — it is two, run side by side under a single label: Sales Tax on goods and Service Tax on services. They have different rates, different registration thresholds and hit different businesses, which is why so many invoices get it wrong. Malaysia replaced GST with SST in 2018, then raised the standard service tax rate in 2024. Here is exactly how each tax works, what rate applies to your transaction, who has to register, and how to add or strip out SST — using the same rates this site's calculator applies.
Two taxes, one name
Unlike GST, SST is a single-stage tax: it is charged once, not at every step of the supply chain, so there is no input-tax credit to claim back. The two components are:
| Sales Tax | Service Tax | |
|---|---|---|
| Applies to | Manufactured & imported goods | Prescribed taxable services |
| Rate | 5% or 10% (some goods exempt) | 8% standard (6% for some services) |
| Charged at | Manufacturer / import level | Point the service is provided |
| Typical registrant | Manufacturers, importers | F&B, telco, professional services, etc. |
The service tax rate: 8% since March 2024
The standard service tax rate rose from 6% to 8% on 1 March 2024. The 6% rate was kept for a specific set of services to soften the impact on everyday spending: food and beverage, telecommunications, parking, and logistics. Everything else prescribed as a taxable service — professional services, brokerage, IT services, digital services and so on — is at 8%. So the first question on any service invoice is not "how much SST" but "which service tax rate applies here".
Sales tax was unaffected by the 2024 change and remains at 5% or 10% depending on the goods, with a wide list of exempt essentials.
Adding SST vs extracting it — a worked example
If a price excludes SST, you add it on top: RM1,000 of professional services at 8% means RM80 tax and a RM1,080 total. If a price is quoted SST-inclusive, you have to work backwards to find the tax already inside it — you cannot just take 8% of the gross.
To extract 8% service tax from a RM1,080 gross figure, divide by 1.08 to get the net (RM1,000), then the difference (RM80) is the tax. Taking 8% of RM1,080 (RM86.40) would overstate it. The calculator below handles both directions — pick "amount excludes SST" to add, or "amount includes SST" to strip it out.
Who has to register for SST
Registration is threshold-based, not automatic. A business must register once its annual taxable turnover exceeds the prescribed threshold — commonly RM500,000 for most taxable goods and services (a higher threshold applies to certain categories such as some food and beverage operators). Below the threshold you neither register nor charge SST. Once registered, you charge SST on your taxable supplies and file returns bi-monthly (every two months) to the Royal Malaysian Customs Department (RMCD), which administers SST — not LHDN.
The scope of taxable services has also widened over recent years, bringing more service categories into the net, so a business that was outside SST before may fall inside it after a scope expansion even if its turnover has not changed.
SST is not GST
A recurring confusion: no, GST has not come back. Malaysia abolished the 6% GST in 2018 and reintroduced SST in its place. The practical difference for a buyer is that SST has no input-tax mechanism — a registered business cannot offset the SST it paid on inputs against the SST it collects, so the tax tends to embed into prices rather than being reclaimable. If an invoice says "GST", it is either historical or mislabelled.
Important caveats
This is a general explanation and a planning estimate only. The exact rate, exemption and threshold for any specific good or service is set by the relevant SST orders and is updated from time to time — including periodic expansions of the taxable-service scope. Always confirm the current rate and your registration obligation against the official RMCD MySST portal (mysst.customs.gov.my) before charging or claiming SST.
Last reviewed: 2026-07-09