Effective 1 January 2024, the Royal Malaysian Customs Department (RMCD) has introduced changes to the Sales Tax regulations for Low-Value Goods (LVG). Below is an overview of the updates:
Key Features of the LVG Sales Tax
Under the new LVG sales tax regulations, sellers are required to register, collect, and remit a 10% sales tax if they meet the following conditions:
- Annual LVG Sales: Exceed MYR500,000 in a 12-month period.
- Business Operations: Sell LVG through an online platform to consumers in Malaysia, either as an individual seller or marketplace operator.
Requirements for Eligible Sellers
Sellers that meet the registration threshold must:
- Register for Sales Tax with RMCD via https://lvg.customs.gov.my.
- Charge a 10% sales tax on LVG (valued at MYR500 or below) at the point of sale.
- Submit quarterly tax returns and remit collected taxes in Malaysian Ringgit (MYR).
Information for LVG Sellers Shipping to Malaysia
If you are a Registered Seller (RS), please ensure you provide the following details to your logistics provider when creating an order:
- LVG Registration Number issued by RMCD
- Value of each item in the parcel
- Indication of whether LVG Sales Tax has been paid (Yes/No)
Impact on Consumers in Malaysia
From 1 January 2024, consumers in Malaysia will be charged a 10% Sales Tax by LVG-registered sellers on:
- Goods valued at MYR500 or below, are imported into Malaysia via air, sea, or land.
- The tax will apply to the item price only, excluding transportation and insurance costs.
Exclusions
This LVG sales tax does not apply to:
- Tobacco, alcohol, and electronic cigarette products (which are taxed separately).
- Goods imported by non-registered sellers (may be subject to tax upon import).
- Goods exceeding MYR500 in value, will follow standard import tax and duty rules.
Customs Clearance and Import Procedures
- LVG imports must comply with existing Malaysian import regulations.
- De Minimis Exemption: Air shipments valued at MYR500 or below are exempt from Import Duty and Sales Tax on Imports, provided LVG tax has already been collected at the point of sale.
- Shipments via land or sea do not qualify for de minimis exemption and may be subject to additional Import Duty and Sales Tax on Imports.
- Failure to provide an LVG Registration Number may result in additional tax charges upon importation.
For Further Information
For more details, please visit the Royal Malaysian Customs Department website or consult your logistics provider to understand how these changes may impact your business.
