What is SST?
SST is the short form for Sales and Service Tax. Service tax applies to service providers while Sales Tax applies to manufacturers.
Features of Service Tax
Service tax is imposed on the output of your service one one stage. It is an add on on the price of your service. The rate ranges from 6% to 8%, and there are certain industry is exempted under service tax.
Service tax applies territorially in Malaysia.
Threshold of service tax
Service tax applies to service provider if the annual revenue reaches RM500,000.00. Once business reaches RM500,000.00 threshold, service tax provider has to register with Custom for Service Tax registration no. Thereafter, to pay service tax not later than every 90 days.
Designated Area & Special Area
Service tax applies territorially in Malaysia, and there are exemption for service tax in area such as Designate and Special Area.
Designated Area are Tioman, Langkawi, Pangkor, Labuan and Johor Free Trade Zone @Forest City.
Special Area are warehouse, licensed manufacturer, Petroleum supply based and Joint Development Area.
Taxable Service & Taxable person
Service tax is imposed on taxable service & taxable person who reaches RM500,000.00. F & B service tax threshold is at RM1.5 million.
The issue of Service Tax applies is whether the scope of services provided is service tax exempted.
The taxpayer payer company has to remit service tax every 3 months. In the event that the taxpayer did not remit the service tax to custom, there will be a tax penalty imposed for failure to remit service tax.
