Starting from July 2025, Malaysia’s Service Tax (SST) framework has expanded significantly. Many businesses that were previously exempted may now be required to register—depending not just on the type of service provided, but more importantly, whether the threshold has been met.
Confused about how SST registration works? The key question isn’t what you offer—it’s how your revenue is calculated.
✅ This article breaks down the 3 critical factors that determine whether you need to register for SST.
1. Which 12-month period should be used to calculate your revenue?
SST registration is triggered based on your total taxable revenue over any 12-month period. Here are three possible scenarios:
- Scenario 1: Review the past 12 months
This applies to ongoing businesses. Calculate your total revenue from the current month going back 11 months. - Scenario 2: Forecast for the next 12 months
Suitable for newly operating businesses within their first year. Add the current month and the next 11 months of projected revenue. - Scenario 3: New company just started operations
For newly incorporated businesses, estimate based on initial months and project forward for the full year.
Once your revenue exceeds the threshold in any continuous 12-month period, SST registration becomes mandatory.
2. How do you determine which services count toward the threshold?
- If one service exceeds the threshold — register SST
For example, if your advertising service alone exceeds RM500,000, registration is required. - Multiple services under the same group — must be combined
Example: IT services (RM300,000) + Accounting services (RM300,000) = RM600,000 under Group G
Since they belong to the same group, total revenue exceeds the RM500,000 threshold → registration required. - Services from different groups — do not combine
Example: IT (Group G) + Food and Beverage (Group K)
Evaluate each group against its respective threshold separately.
3. Do branches or subsidiaries need to calculate separately?
- Same company, multiple branches — combine the revenue
If Branch A and B are both under the same Sdn Bhd entity, their combined revenue counts toward the threshold. - Different legal entities — calculate separately
Even if they are under the same corporate group, as long as they are separate legal entities (e.g. different Sdn Bhd names), their thresholds are assessed independently.
Important Reminder: These SST thresholds should not be overlooked
- Private Healthcare Services (for citizens and non-citizens): RM1,500,000
- Rental or Leasing Services (excluding residential rental): RM1,000,000
- Construction Services (excluding residential construction): RM1,500,000
Note: Even if your services are SST-exempt (e.g. B2B services, micro enterprises, or services provided only to Malaysian citizens), the revenue from those services must still be included when calculating your total threshold.
If your total taxable value exceeds the group threshold, SST registration is required.
(201706002678 & AF 002133)