Regulatory Changes for Shipping to Malaysia in 2024

10% Sales Tax on Low-Value Goods Effective in Malaysia in 2024

The Royal Malaysian Customs Department (RMCD) of Malaysia has officially communicated that the deferred 10% sales tax on Low-Value Goods will come into effect starting January 1, 2024.

Low-Value Goods (LVG), as defined by the RMCD, include all items that are sold at a price not exceeding MYR500 and are transported into Malaysia by land, sea, or air. 

Excluded in this legislation are “cigarettes; tobacco products; intoxicating liquors; smoking pipes (including pipe bowls); electronic cigarettes and similar personal electric vaporizing devices; and preparation of a kind used for smoking through electronic cigarette and electric vaporizing device, in forms of liquid of gel, whether or not containing nicotine).

The 10% sales tax is charged on the sale value of Low-Value Goods not including any tax, duty, fee, or any other charges such as shipping, insurance, or other costs. 

From RMCD’s guidelines, see the example below:

Sales Tax Implications on Shippers

Any local or overseas seller, selling and shipping directly to Malaysian consumers via their website or online marketplaces (provided that they meet the minimum criteria of having a total sales value of LVG exceeding MYR500,000 within a 12-month period) must:

• Apply as a Registered Seller (RS) with the Customs Authorities of Malaysia. 
• Collect the 10% Sales Tax on all Low-Value Goods when the consumer buys their product online.
• Return, File and Pay the collected sales tax periodically to the Malaysia Customs Authorities.

Note that the failure to provide the LVG Registration Number (LRN) may result in additional Sales & Services Tax (SST) levied upon import.

How to Avoid Delays in Your Shipments

To maintain continuous business in Malaysia and avoid any delays, here are necessary steps for shippers and online marketplaces that ship Low-Value Goods to Malaysia:

1. Inform their Malaysian consumers about this regulatory change and its effectivity date.
2. Provide accurate and complete information on commercial invoice data and include the Low-Value Goods Registration Number (LRN) as a registered seller. For DHL Express Shipping, this may be done electronically. 
3. Research and understand the Malaysian regulatory change and assess whether it applies to your business. 

Should you have any questions regarding this regulatory change or have any concerns regarding your shipments to Malaysia, please get in touch with our Couriers & Freight customer service.

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