GST Rate in Malaysia
How much is GST in Malaysia?
The standard goods and services tax (GST) in Malaysia is sales and service tax (SST) of 10%. It applies to most goods and services. The two reduced SST rates are 6% and 5%.
The first reduced SST rate (6%) applies to restaurants, hotels and accommodation, car hire, rental and repair, domestic flights, insurance, credit cards, legal and accounting, business consulting, electricity, telecoms, pay-TV, digital supplies.
The second reduced SST rate (5%) applies to basic foodstuffs, petroleum oils, construction materials, IT, telecommunications and printing hardware and materials and timepieces.
What is a SST rate?
SST (sales and service tax) is a type of consumption tax. The government in Malaysia applies it on the sale of goods and services.
SST isn’t paid by businesses — instead, it’s charged to consumers in the price of goods, and collected by businesses, making it an indirect tax. Businesses are then responsible for reporting it to the government.
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How to work out SST in Malaysia.
Total price including GST
To work out the total price at the standard rate of SST (10%), multiply the original price by 1.1. For the first reduced SST rate (6%), multiply the original price by 1.06. For the second reduced VAT rate (5%), multiply the original price by 1.05.
Total price excluding GST
You can calculate the total price excluding the standard VAT rate (10%) by dividing the original price by 1.1. For the first reduced VAT rate (6%), divide the original price by 1.06. For the second reduced VAT rate (5%), divide the original price by 1.05.
How does SST work?
SST is collected at each point in the production of goods — every time value is added and a sale is made. It’s designed to be paid by the consumer at the end. Here’s an example:
- A supplier sells a badminton racket to a shop for RM120. They owe RM20 GST to the government.
- The shop pays $120 but can claim the RM20 back from the government, so the shop doesn’t pay the SST.
- The shop sells the racket to the customer for RM220. The SST is RM44 which the customer, as the end-user, pays in full to the shop.
- Together with the reclaimable RM20 GST, the shop will end up paying RM24 to the government.
SST Refund.
When you’ve visited Malaysia, you’ll be able to get a SST refund on items bought if:
You live outside Malaysia and are going back home.
There are multiple ways of receiving the refund — either get paid immediately at a refund booth at the airport or send the approved form to a refund company.
How to get a SST refund in 3 simple steps?
Application form
Get a Tax Refund Application Form from the retailer. You might also be asked to show your passport to check that you’re eligible.
Customs check
At customs, present your passport, SST form(s), SST invoice(s) and the tax-free goods.
Refund approved
If all the criteria is met, customs will approve your form. You’ll get a signed form that allows you to receive the refund.