Do you know that SMEs with sales below RM1 million can enjoy exemptions on rental under new Service Tax rules from 1 July 2025 only if registered via MyPMK and updated annually under RMCD Service Tax Policies 2/2025?

The expanded Sales & Service Tax (SST) has officially kicked in. Effective 1 July 2025, the Royal Malaysian Customs Department (RMCD) issued 5 new Service Tax Policies – covering financial, rental/leasing, construction, education, and private healthcare services.

Some key highlights:

1. Rental and leasing services are now taxable under Group K at 8%, unless exempted.
2. RMCD has introduced a one-year exemption for non-reviewable contracts signed before 1 July 2025.
3. Group relief is available for related companies providing rental/leasing services.
4. Financial services may enjoy B2B exemptions to avoid double taxation in the supply chain.
5. The registration threshold for financial and rental services has increased to RM1 million annually.
6. SME tenants with sales under RM1 million are exempted from paying service tax on rental but must register via MyPMK and keep records updated.
7. Beauty services are no longer taxable.

At KTP, we encourage all businesses to review their contracts, tax exposure, and registration status.

Read the full content in our blog
https://www.ktp.com.my/blog/what-is-the-scope-expansion-of-sst-in-malaysia-2025/17july2025