Sales Tax in Malaysia
Sales tax in Malaysia is a single stage tax applicable to those importers or manufacturers.
Sales tax collected by the companies from the customers are to be remitted to Customs Departments every two months.
In Malaysia, almost all manufacturers are required to be licensed under the Sales Tax Act 1972.
Manufacturers with yearly sales of not more than RM100,000 have to apply for a certificate of exemption from licensing.
Licensed manufacturers are to charge 10% sales tax on sales value of their manufactured products and to collect the tax from their customers.
However, the raw materials and machinery used in productions are eligible for exemption from the tax.
The following manufacturing activities are exempted from sales tax:
- All exports are exempted from sales tax.
- Live animals, fish, seafood and certain essential food items including meat, milk, eggs, vegetables, fruits, bread, etc.
- Medical and educational equipment including sports equipment, books, etc.
- Photographic equipment and films.
- Motorcycles not exceeding 200cc capacity, bicycles for adult use.
- Machinery for textile industry, food preparation industry, paper and printing industry, construction industry, metal industry, etc.
- Primary commodities including cocoa, rubber, etc.
- Naturally occuring mineral substances, chemicals, etc.
- Helicopters, aircraft, ships and other vessels.
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