MALAYSIA will start charging a 10% sales tax on 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 online goods sold below RM500 effective April 1, 2023 under Budget 2022, but it was postponed indefinitely by RMCD in March. 

In the frequently asked questions section on LVG sales tax published on its website on November 6, 2023, the department said the imposition of the tax would start on January 1, 2024, although the sales tax legislation on LVG had come into force from January 1, 2023. 

RMCD defined LVG as all goods – excluding cigarettes, tobacco products, and intoxicating liquors – that 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 RMCD if the total sales value of LVG brought into Malaysia exceeds RM500,000 in 12 months. 

Separately, 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 RMCD’s website at http://www.customs.gov.my/en/pages/main.aspx. 

According to the Federal Government Gazette published by the Attorney General’s Chambers on December 8, 2023, Prime Minister 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 on December 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. – Bernama, December 16, 2023.