If you’re a business owner dealing with Malaysia’s Sales and Service Tax (SST), you’ve probably wondered: Do I need to separate Sales Tax and Service Tax? How do they affect invoices and payments? Let’s break it down simply to avoid miscalculations and keep your records compliant.
1. First, Understand: SST Has Two Parts – They’re Not the Same!
SST isn’t a single tax—it’s a combination of two distinct taxes with different rules:
Sales Tax: Applies to physical goods (e.g., clothing, electronics, building materials). The standard rate is 10% (some goods qualify for 5% or are exempt).
Service Tax: Applies to services (e.g., restaurant meals, repairs, consulting, beauty services). The standard rate is 6% (some services are exempt).
✅ Key Point: Charge Sales Tax on goods, Service Tax on services. Never mix them!