How to Register SST In Malaysia: A Straightforward Guide 

Remember GST? For many Malaysian business owners, that tax system is a fleeting memory, until it was replaced by the Sales and Service Tax, or SST for short. 

If you’re running a business, understanding SST and knowing how to register for it is a very important step as there are penalties for not doing so. This guide is designed to provide you with a clear, straightforward overview of the SST registration process, including who needs to register, and how to register.

What Is SST 

The SST is a consumption tax levied on taxable goods and services in Malaysia. It replaced the not-so sorely missed GST and operates on a single-stage system. This means the tax is charged at either the manufacturing or service provision level. 

Sales Tax: Applied to manufactured goods. Rates vary, with a standard 10%.

Service Tax: Applied to taxable services. Most services are now 8%, but some, like food, beverage and telecommunications, are 6%.

Who Needs to Register SST in Malaysia

Generally, businesses with an annual sales turnover exceeding RM 500,000 need to register for SST in Malaysia. They must fulfil the following condition:

Sales Tax

• Your business is engaged in the manufacturing of taxable goods.
• The total sales value of your business has exceeded RM 500,000 in the past 12 months.
  

Service Tax

• Your business provides taxable services.
• The total value of taxable services within 12 months surpasses the prescribed threshold of RM 500,000, although certain services such as restaurant operations have a threshold of RM 1,500,000.

The standard sales tax rate for non-petroleum goods is 10%, but certain goods may attract reduced rates of 5% or other specific rates, depending on their category.

SST Exemption

You might be surprised to hear that certain business activities and goods are not subject to SST. If your business primarily focused on producing goods for export or providing services related to imports, you might find your operations fall outside the scope of taxation.

Sales tax exemptions are granted for:

• Products intended for overseas markets.
• Basic necessities like live animals and staple foods.
• Educational materials, such as books.
• Bicycles and their related parts.
• Raw materials from the earth, like minerals.
• Agricultural aids, such as fertilizers.
• Items crafted by goldsmiths.

Service tax are exempted for:

• A range of logistics services, including management, supply chains, port operations, and freight forwarding, when provided between businesses.
• Services located within designated Free Commercial or Industrial Zones, such as those in Port Klang, Pasir Gudang, Bayan Lepas, and Kulim.
• Sea freight for shipments between Peninsular Malaysia and Sabah, Sarawak, or Labuan.
• Delivery services for individuals through e-commerce platforms and standard courier services.
• Maintenance of residential properties, including services provided by resident associations and developers.

For a complete and current list of exempted goods, it’s best to consult the official MySST website.

How To Register SST

Although registering for SST may seem a daunting task, rest assured you can easily register through the online portal MySST. 

Just remember, sales tax and service tax are registered separately, so you’ll need to go through the process twice if you’re dealing with both. Alternatively, if you find the whole process confusing, or want to ensure you’re fully compliant, consider engaging audit firms that offer company secretarial services.

But before you even start the online registration, there are a few things to consider:

Determine Eligibility: First, check if your business meets the registration threshold. Are your sales above RM 500,000? Do you provide services that cross the specific threshold?

Gather Required Documents: Prepare the necessary documents, which include business registration details, company bank statements, and information about your taxable goods or services.

Once you’re ready, here’s the simplified breakdown of the online SST registration process:

1. Go to the MySST Portal: You’ll need to visit the official government website. Just search for “MySST portal” on Google and you should find it easily.

    

2. Fill Out the Registration Form: Once you’re on the portal, you’ll find a registration form. Be sure to fill it out with accurate information.

    

3. Online Submission and Verification: After submitting the form online, the Customs Department will then verify the information you have given.

    

4. Get Your Approval: If everything is in order, the system will generate an approval letter, confirming your successful registration.

    

5. Registration Number: You’ll also receive a SST registration number. This number is essential for issuing tax invoices and complying with SST regulations.

    

6. Important Details: The system will provide details like the effective date of your registration, along with any rules and responsibilities you need to be aware of.

    

7. Email Confirmation: A copy of the approval letter will be sent to your registered email address for your records.

SST Penalty Rate

Failure to comply with the SST regulations can lead to severe penalties, including.

• A fine of up to RM50,000,
• A prison term of up to three years,
• Or both the fine and imprisonment.

Late Payment Penalties

Businesses are also subjected to penalties associated with late SST payments, failure to pay on time would result in progressively heavier fines. 

Conclusion On SST Registration

SST registration is a necessary step for many Malaysian businesses. So, if you’re looking to register for SST, or if you’re a new business needing to handle all the business licence Malaysia, including SST, Accounting.my can simplify the process. 

We understand the ins and outs of Malaysian business regulations, and we’re here to help you get your business set up correctly and efficiently. 

Don’t waste valuable time on SST registration just to pass regulations, leave these matters to us and you focus on what you do best, running your business.