Description

Effective from 1 July 2025, the Malaysia service tax scope will expand to include rental, leasing and expanded wellness centres (E.g. all kinds of beauty services, postnatal care for mothers and infants, welfare care for the elderly).

For rental and leasing, service tax at 8% applies to commercial property, office, warehouse, machinery and vehicle. Businesses exceeding the RM500,000 threshold within 12 months period need to register.

For beauty centres, hair salons, spas, and wellness centres, service tax at 8% applies to services such as facial treatments, hairdressing, body massage, slimming, and post-natal care packages. The threshold for registration is RM500,000 within 12 months period. Sales of beauty and hair care products within the above-mentioned premises may also be subject to service tax.

Understanding the scope, thresholds, exemptions, and compliance obligations is crucial to ensure accurate service tax treatment and avoid penalties.