SST 2025: Is Your Business Ready for the New Scope?
- Zulfadli A
- Apr 30
- 2 min read
Updated: Jun 8
The Malaysian government has announced key updates to the Sales and Service Tax (SST) framework, effective from 1 January 2025. These changes will impact a wide range of businesses, particularly those offering services. It is important that businesses assess how these changes apply to them and take the necessary steps to ensure compliance.
Key Changes in SST 2025
Broader Scope of Taxable Services
The scope of services subject to service tax has been expanded. Among the newly taxable services are:
Logistics services (including delivery and freight forwarding)
Maintenance and repair services
Training and consultancy
Local digital services (previously focused mainly on foreign service providers)
Businesses that were not previously subject to service tax may now fall within the taxable category and be required to register with the Royal Malaysian Customs Department.
Increased Service Tax Rate
The standard service tax rate will increase from 6% to 8%, except for certain sectors such as food and beverage, telecommunications, and parking services, which will remain at 6%. Businesses affected by this change should review their pricing structures and update invoicing and accounting systems accordingly.
Reassessment of Taxable Turnover Threshold
The RM500,000 annual taxable turnover threshold remains in place for registration. However, due to the expansion of taxable services, some businesses may now reach this threshold more quickly. It is advisable to monitor your revenue closely and assess whether SST registration is now required.
Tighter Compliance Measures
Customs is expected to increase monitoring and enforcement efforts in 2025. Businesses should ensure:
Accurate SST returns are submitted on time
Tax invoices are issued in accordance with requirements
Proper records are maintained and made available upon request
What Should Businesses Do?
Review Your Business Activities
Determine if any of your services are now included in the revised scope of taxable services. If unsure, refer to the latest SST guidelines issued by Customs or consult a licensed tax professional.
Evaluate Your Revenue
Regularly track your revenue to assess whether you meet the RM500,000 threshold for service tax registration. This is especially important if your business is close to the threshold or if you offer multiple types of services.
Update Internal Systems
Ensure that your accounting, invoicing, and point-of-sale systems are updated to apply the correct SST rates and tax codes from January 2025.
Educate Key Staff
Finance, sales, and operations teams should be informed of the new tax requirements to prevent errors in billing and reporting.
Seek Professional Support
If your business is affected by the changes and you need clarification or support, it may be helpful to engage a tax agent or accounting firm for advice and assistance with registration or compliance.
Conclusion
With the expanded scope and revised rates under SST 2025, businesses should act promptly to understand their obligations and make the necessary adjustments. Proactive planning can help minimise the risk of non-compliance and ensure a smoother transition into the updated tax environment.
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