Introduction

The sales tax registration threshold Malaysia is set at RM500,000 under the Sales Tax Act 2018. Manufacturers of taxable goods must register once this limit is reached, with clear rules on liability, voluntary registration, cessation, and exemptions.

Threshold to Register

Historical Method

If the total sale value of taxable goods exceeds RM500,000 within the current month and the 11 months before, the manufacturer must register.

Future Method

If sales in the current month and the following 11 months are expected to exceed RM500,000, registration is also required.

Sub-Contractors

A sub-contractor exceeding RM500,000 per year in taxable goods must register as well.

Liable to Register

A manufacturer must apply to register no later than the last day of the month after becoming liable.
Example: Manufacturer A reached RM500,000 on 15 Dec 2020 → must register between 1 Jan 2021 and 31 Jan 2021.

Voluntary Registration

Manufacturers below threshold may voluntarily register, including:

• Taxable goods producers below RM500,000.
• Manufacturers exempted under Schedule B of the Sales Tax (Persons Exempted from Payment of Tax) Order 2018 (e.g., raw materials, components, packaging, manufacturing aids).

Note: No branch registration is allowed.

Cessation of Liability

A registered manufacturer must notify RMCD if:

• Manufacturing taxable goods has ceased.
• Sales in current month + next 11 months fall below RM500,000.

Exemption from Registration

Exempted manufacturers include:

• Producers of non-taxable goods (not eligible for voluntary registration).
• Manufacturers and sub-contractors below threshold.
• Exempted activities (e.g., tailoring, incorporation into buildings, opticians, jewelers).

Exempted manufacturers do not need a certificate of exemption, but may voluntarily register under Section 20(2).

Key Takeaways

• Threshold: RM500,000 sales value.
• Mandatory: Register within 1 month of liability.
• Voluntary: Available for below-threshold or exempted manufacturers.
• Cessation: Notify RMCD if sales drop below threshold.
• Exemptions: Non-taxable goods, small-scale manufacturers, specific exempted services.

FAQ

Q1: What is the sales tax registration threshold Malaysia?
The threshold is RM500,000 in sales of taxable goods within 12 months.

Q2: Can manufacturers register voluntarily?
Yes, even if below threshold or exempted, manufacturers may apply voluntarily.

Q3: Do exempted manufacturers need a certificate?
No certificate is required, but they may still apply for voluntary registration.

ANC Group – Your Personal Tax Advisor

Tax consulting is the core service of ANC Group. Our tax professionals provide clients with comprehensive tax support and guidance. We offer tax consulting and compliance services for expatriates, entrepreneurs, and listed and non-listed companies.

Our tax consulting services include business tax, transaction tax, personal tax, and corporate income tax. We don’t just guide you in interpreting and applying complicated taxation rules, but to explore new opportunities and business trends.

ANC Group keep you abreast with Malaysia tax updates and any changes in the local regulations.

We work closely with industry specialists, authorities, and associated professionals within ANC Group to provide the best-in-class integrated tax planning solutions. ANC specialists coordinate the accounting and taxation services to bring your business to success.

If you need professional tax advisory services regarding the Malaysia Income Tax Act 1967, our team is ready to assist you. Contact us here to discuss how we can support your business.