Malaysia to Implement 10% Sales Tax on Low Value Goods Sold Online from January 1, 2024
In a recent announcement by the Customs department, Malaysia is set to introduce a 10% sales tax on low value goods (LVG) sold online starting January 1, 2024. This decision follows the postponement of the initial implementation, which was originally scheduled for April 1, 2023, under Budget 2022. The Customs department has clarified the details surrounding this sales tax, providing guidelines and FAQs to ensure a smooth transition for online sellers and buyers.
Malaysia: 10% Sales Tax on Low Value Goods (LVG)
The Customs department defines LVG as items, excluding specific products like cigarettes, tobacco, intoxicating liquors, electronic cigarettes, and smoking-related preparations, sold at a price not exceeding RM500. These goods are brought into Malaysia by land, sea, or air.
Sellers of LVG on online platforms or operators of online marketplaces must register with the Customs department if the total sale value of LVG brought into Malaysia exceeds RM500,000 within a 12-month period. Although the sales tax legislation on LVG came into force from January 1, 2023, the actual imposition of the tax will begin on January 1, 2024.
The Sales Tax (Amendment) Act 2022, signed by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim on December 4, 2023, officially appoints January 1, 2024, as the effective date for the charging and levying of sales tax on LVG. The Customs department has provided comprehensive guidelines on the implementation of LVG sales tax, along with frequently asked questions (FAQs) to address common queries from businesses and consumers.
Pokdepinion: As Malaysia prepares to implement the 10% sales tax on LVGs sold online, it is crucial for sellers and online marketplaces to familiarize themselves with the guidelines and registration requirements. The Customs department’s proactive approach in providing information through FAQs and guidelines ensures transparency and aids in a smooth transition for all stakeholders. For more details, individuals can refer to the Customs department’s official website.
