Information Sharing

Understand the Latest SST Policy Changes at a Glance!

Posted LnCoadmin

Effective from 1 July 2025. Wide-ranging impact across financial, leasing, construction, and other service sectors!
Key Highlight – Beauty services are now exempted from Service Tax!
Take note of new income thresholds, rate adjustments, and updated filing requirements!

All key points summarized in one image – save and share now!

1. King Crab, Salmon & Cod Fish, Truffle Mushroom, Imported Fruits, Essential Oil, Silk, and Industrial Machinery
  • Sales Tax: 5%
  • Exemptions: Apple, Orange, Mandarin Orange, and Date palm
2. Tungsten waste & scrap, Paintings, Drawings, Prints and sculptures, Racing bicycles
  • The Sales Tax Rate has been increased from 0% to 10%.
3. Rental & Leasing Services
  • Service Tax: 8%
  • Threshold: Entities with Annual Revenue more than RM 1M
    (Residential rentals is excluded from threshold calculation)
  • Non-taxable Item: Residential rentals/ Reading materials/ Financial leasing
  • Exemptions: Federal & State Government (permanently exempted),
    Local Government (exempted until 30 September 2025), Non-reviewable Contracts (exempted for one year), Tenant is a Micro or Small Enterprise, Sublet or Sublease
4. Construction Services
  • Service Tax: 6%
  • Threshold: Entities with Annual Revenue more than RM 1.5M
    (Construction work for residential buildings is excluded from
    threshold calculation)
  • Non-taxable Item: Residential buildings & related facilities
  • Exemptions: B2B, Designated Areas, Government-related Projects,
    and Non-reviewable Contracts (exempted for one year)
5. Financial Services based on fees or commissions
  • Services Tax: 8%
  • Threshold: Entities with Annual Revenue more than RM 1M
  • Exemptions: Basic Banking Services, Shariah-compliant Financing,
    Foreign Exchange Gains, and Capital Market Services
6. Private Healthcare Services
  • Service Tax: 6%
  • Threshold: Entities with Annual Revenue more than RM 1.5M
  • Exemptions: Malaysian Citizens, Government Agency Services, Services in Designated Areas
7. Private Education
  • Services Tax: 6%
  • Threshold: Entities who charges more than RM60,000 per student
    per year
  • Exemptions: Government Schools, Malaysian Citizens, Malaysian Citizens holding an OKU Card
8. Higher Education and Language Centres
  • Services Tax: 6%
  • Exemptions: Malaysian Citizens
Important Dates

1. July 1, 2025

  • New Sales Tax Rate change takes effect

2. Aug 2025

  • Businesses that have reached the threshold but have not registered for SST must complete their registration in August

3. Dec 31, 2025

  • Grace period ends
Important Notes
  • B2B, Micro & Small Enterprise and Malaysian Citizen Service Tax exempted sales shall be included in Threshold Calculation
  • No penalties or enforcements until Dec 31, 2025 for businesses who demonstrate a real effort to meet requirements and reporting requirements.

**Lastest Updates on 03.07.2025