Sales and Service Tax (SST) Compliance

Sales Tax

Sales Tax is a single-stage tax imposed on taxable goods manufactured in or imported into Malaysia.

Key Features:
  • Rate: Generally 10% (with some items at 5% or specific rates)
  • Applied at the manufacturing or import stage
  • Not a cascading tax - applied only once in the supply chain
  • Registration threshold: Annual turnover exceeding RM500,000
Who Needs to Register:
  • Manufacturers of taxable goods with annual sales exceeding RM500,000
  • Importers of taxable goods

Service Tax

Service Tax is imposed on specific services (taxable services) provided in Malaysia by registered service providers.

Key Features:
  • Rate: Generally 6%
  • Applied on specific taxable services
  • Registration threshold varies by service category
  • Common threshold: Annual turnover exceeding RM500,000
Taxable Service Categories:
  • Accommodation services
  • Food and beverage services
  • Professional services (legal, accounting, consulting, etc.)
  • Insurance and takaful services
  • Telecommunication services
  • IT services
  • ... and several other categories

SST and E-Invoicing Requirements

With the introduction of Malaysia's MyInvois e-invoicing system, businesses need to ensure their e-invoices properly reflect SST compliance. Here are the key requirements:

Requirement Description
SST Registration Number For SST-registered businesses, the SST registration number must be clearly displayed on invoices
Tax Category Identification E-invoices must properly identify which items are subject to Sales Tax or Service Tax
Correct Tax Rates Apply the appropriate tax rate (10%, 5%, 6%, etc.) based on the type of good or service
Tax-Exempt Items Clearly identify items that are exempt from SST
Separated Tax Amount The amount of SST charged must be shown separately from the price of goods/services
Invoice Date and Number Proper sequential numbering and accurate dates for tax reporting periods

SST Filing and Payment

Filing Requirements
  • Frequency: Bimonthly (every two months)
  • Due Date: Last day of the month following the taxable period
  • Forms: SST-02 for Sales Tax and Service Tax returns
  • Submission: Via RMCD's MySST portal
Record Keeping
  • Invoice Records: All sales and service tax invoices must be retained
  • Records Required: Purchase and sales records, inventories, financial statements
  • Retention Period: 7 years
  • Language: Records should be in Bahasa Malaysia or English

Penalties for Non-Compliance

Failing to comply with SST regulations can result in significant penalties. Here are some common penalties:

Offense Penalty
Failure to register Fine up to RM30,000 or imprisonment up to 2 years, or both
Late filing of returns Fine up to RM50,000 or imprisonment up to 3 years, or both
Late payment of tax Penalty based on length of delay:
- 10% for first 30 days
- 15% for 31-60 days
- 20% for 61-90 days
- 25% for more than 90 days
Incorrect returns Fine up to RM50,000 or imprisonment up to 3 years, or both
Evasion of tax Fine of 10x the amount of tax or RM100,000 (whichever is higher), or imprisonment up to 5 years, or both

How MyEzyInvois Helps with SST Compliance

Our Platform Makes SST Compliance Easy

  • Pre-configured SST tax codes and rates
  • Automatic calculation of tax amounts
  • Clear identification of taxable vs. exempt items
  • Professional invoice templates with all required SST information
  • Secure storage of your invoicing history for the required 7-year period
  • Easy export of records for SST reporting purposes

SST-Compliant E-Invoicing

MyEzyInvois ensures your e-invoices meet both MyInvois requirements and SST regulations. Our platform generates invoices that properly display:

  • Your SST registration number
  • Accurate tax categories for each item
  • Proper tax calculations and breakdowns
  • All required SST disclosure statements

This dual compliance saves you time and reduces the risk of penalties from both LHDN and RMCD.