Malaysia’s 10pct sales tax on online sales of low value goods kicks in Jan 1, 2024

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KUCHING, Dec 16: Malaysia is set to implement a 10 per cent sales tax on low value goods (LVG) sold online starting Jan 1, 2024, announced the Royal Malaysian Customs Department (RMCD).

Originally slated to take effect on April 1, 2023, for goods sold below RM500 online, as per Budget 2022, the imposition of the 10 per cent LVG tax was deferred by the RMCD in March of the same year, as reported in a national news report.

In the Frequently Asked Questions (FAQ) section on LVG sales tax, dated Nov 6, 2023 on its website, the RMCD clarified that the sales tax on LVG would officially commence on Jan 1, 2024, even though the sales tax legislation had been in force since Jan 1, 2023.

The RMCD defines LVG as all goods, excluding cigarettes; tobacco products; intoxicating liquors; electronic cigarettes, similar personal electric vapourising devices and preparation of a kind used for smoking through electronic cigarette and electronic vapourising device in forms of liquid; with a sale price not exceeding RM500, imported into Malaysia by land, sea, or air.

Merchants selling LVG through online platforms or managing online marketplaces for LVG transactions must register with the RMCD if the total sales value of LVG entering Malaysia exceeds RM500,000 within a 12-month period. Registration can be done through http://lvg.customs.gov.my.

Additionally, the RMCD had on Nov 3, 2023 published the guidelines on the implementation of LVG sales tax on its portal.

For more details, the public can visit the RMCD’s website at http://www.customs.gov.my/en/pages/main.aspx.

It was reported that the Federal Government Gazette released by the Attorney General’s Chambers on Dec 8, 2023, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim signed the Sales Tax (Amendment) Act 2022, specifying Jan 1, 2024, as the effective date for charging and levying sales tax on low-value goods.

The announcement was made in accordance with the powers conferred by subsection 1(3) of the Sales Tax (Amendment) Act 2022 [Act A1671]. — DayakDaily