Malaysia SST Expansion July 2025: Is Your Industry Affected?
2026-06-10
The 1 July 2025 SST expansion is the broadest indirect tax change in years, and many business owners still aren't sure whether they need to register. Here's the breakdown by industry.
Newly taxable services
| Service category | Rate | Registration threshold (12-month turnover) |
|---|---|---|
| Rental & leasing (commercial property, equipment) | 8% | RM1,000,000 |
| Construction works | 6% | RM1,500,000 |
| Financial services (fee-based) | 8% | RM1,000,000 |
| Private healthcare (foreigners) | 6% | RM1,500,000 |
| Private education (high-fee / foreign students) | 6% | Specific conditions |
Existing categories continue: general services 8% (RM500k threshold), F&B 6% (RM1.5M), telecom 6%, parking 6%, logistics 6%.
Details that catch people out
1. Commercial rental at 8% is the most common trap. If you rent out shoplots, factories or offices and rental income exceeds RM1 million over 12 months, you must register and charge SST. Residential rental is out of scope. An exemption exists for MSME tenants (annual turnover below RM500k) — but the tenant must provide evidence.
2. Construction at 6% covers all contracting. Main contractors and subcontractors alike. Residential projects for individuals are exempt. The B2B exemption prevents cascading — a subcontractor billing a registered main contractor can be exempt.
3. Beauty services were withdrawn. They were announced in June 2025 but pulled before implementation. Any article saying beauty salons charge SST is outdated.
4. Penalty grace period has ended. No penalties were imposed up to 31 December 2025, but enforcement has been normal since 2026.
How to decide whether to register
- Check whether your service is on the taxable list (and check the exemptions)
- Compute your rolling 12-month taxable turnover against the threshold
- If you exceed it, apply for registration by the end of the following month
- Voluntary registration can make sense too — if your customers are mostly registered businesses, B2B exemptions may reduce overall cost
The risk of not registering
If you should have registered and didn't: back taxes are still due, plus penalties of up to 3× the tax. With e-Invoice making turnover fully visible to the authorities, there is essentially nowhere to hide.
Want to know how much SST you'd charge? Use our SST calculator — pick your industry category and calculate instantly.