SST and indirect taxes such as Customs duties have a direct correlation with the bottom line of many businesses, thus influencing the businesses’ pricing and cashflow.

Goods and Services Tax [“GST”] which is also known as Value Added Tax [“VAT”] in some other countries had been abolished by the Malaysian Government since 1^st September 2018. It was replaced on the same date with the Sales and Service Tax [“SST”] Regime which operates as a single-stage tax system.

While SST is designated to be relatively straightforward due to its single-stage nature, the practical reality for businesses under the 2.0 SST framework has become increasingly complex, particularly following the expansion of the scope of taxable services effective 1^st July 2025. Unlike a multi-stage tax system, SST is cumulative in nature. This means that any tax incurred at an intermediate stage forms a permanent part of the cost structure unless the business qualifies for exemption such as B2B exemption. Any inaccuracies in tax treatment may result in the SST becoming an irrecoverable cost and thereby directly eroding the businesses’ profit margins, further exacerbated by penalties of up to 40% for non-compliance.

Given the potential financial and operational implications, it is critical for businesses to gain a comprehensive understanding of SST to ensure full compliance with SST legislation and to avoid any unnecessary penalty arising from non-compliance with the SST legislations.

Our indirect tax services include:

• Assisting in compliance, management, planning and mitigating indirect tax exposure and risks
• Assisting in tariff classification, Customs valuation and documentation review
• Assisting in indirect tax refunds or drawbacks and exemptions applications
• Advising on the mechanism of SST, filing of SST returns, SST advisory services, SST health-check and SST audit by Royal Malaysian Customs Department.