KUALA LUMPUR – Malaysia will start charging a 10% sales tax on imported low-value goods (LVG) sold online from January 1, 2024, announced the Royal Malaysian Customs Department (RMCD).
Malaysia was supposed to impose the 10% LVG tax on goods sold below RM500 online effective April 1, 2023, under Budget 2022, but it was postponed indefinitely by the RMCD in March this year.
In the frequently asked questions (FAQ) on the LVG sales tax published on its website on November 6, 2023, the department said the imposition of sales tax on LVG will start on January 1, 2024, although the sales tax legislation on LVG has come into force from January 1, 2023.
RMCD defined LVG as all goods – excluding cigarettes, tobacco products, intoxicating liquors, electronic cigarettes, and preparation of a kind used for smoking – which are sold at a price not exceeding RM500, and are brought into Malaysia by land, sea or air.
Those who sell LVG on an online platform or operate an online marketplace for the sale and purchase of LVG must register with the RMCD if the total sale value of LVG brought into Malaysia exceeds RM500,000 in 12 months.
Separately, the RMCD also published a set of guidelines on the implementation of LVG sales tax on its portal dated November 3, 2023.
For more information, the public can visit the RMCD’s website at http://www.customs.gov.my/en/pages/main.aspx.
Meanwhile, according to the Federal Government Gazette published by the Attorney General’s Chambers on December 8, 2023, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim had signed the Sales Tax (Amendment) Act 2022: Appointment of Effective Date for Charging and Levying of Sales Tax On Low Value Goods (LVG) on Dec 4, 2023.
“In exercise of the powers conferred by subsection 1(3) of the Sales Tax (Amendment) Act 2022 [Act A1671], the minister appoints January 1, 2024, as the effective date for the charging and levying of sales tax on low value goods,” it read. – December 16, 2023