Understanding Service Tax 2025 Expansion and Application on Construction, Rental and Leasing Services

10 Dec, 2025, Concorde Hotel Kuala Lumpur

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Dr Wendy Tee has over twenty years of experience in senior management and human resources positions for diversified industrial and business environments. Graduated with a Doctor of Business Administration (UUM), Master of Business Administration (UM), Master of Information Technology (UM), Certified Financial Planner (CFP), Certified Business coach (UM), Registered Financial Planner (RFP), HRD CORP Accredited Trainer (HRD Corporation) and Certified Advance Human Resource Practitioner (MIHRM). She has undergone intensive academic training in various human development and knowledge improvement.

 

Dr Wendy is actively involved in management training and lecture. Her latest responsibility involves the lecturing of Executive Master Business Administration (EMBA) for Universiti Teknologi (SPACE) and Financial and Investment Degree programs for Tunku Abdul Rahman University of Management & Technology. She has experience managing training programs from local universities, in house training and public seminar training.

 

Dr Wendy is a licenced financial planner currently registered with Malaysian Financial Planning Council (MFPC). Her responsibility involves the corporate training, financial training, management and human resource consultancy, management and financial advisory. Work with individuals to meet short and long-term financial goals, advise clients to have a good command of investments and security planning, estate planning, tax planning, employee benefits planning and insurance planning.

 

Dr Wendy completed and passed her GST and SST exams organized by Chartered Tax Institute of Malaysia (CTIM) with the cooperation and support from the Royal Malaysian Customs Department (RMC). She has trained more than 80 SME companies in Malaysia to get prepared for the post implementation of GST and SST, mainly dealing with the tax authorities over various indirect tax issues, elements and scope of indirect tax, cycle and operations, rulings, registration, administration, audit and investigations on behalf of her clients.

 

Dr Wendy now focuses on electronic invoicing corporate training and advisory for Multinational companies and small medium enterprises. She reviews and evaluates current invoicing procedures, process workflow (including internal controls) and related system mechanisms to identify changes and improvements required. She also reviews Standard Operating Procedure (SOP) for e-invoice issuance as well as provide tax advisory and recommendation in relation to e-invoice architecture.

 

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FOCUSING ON
  • MODULE 1: KEY CHANGES IN THE EXPANDED SERVICE TAX EFFECTIVE 1 JULY 2025
  • MODULE 2: EXPANSION AND EXEMPTION SCOPE FOR SERVICE TAX ON CONSTRUCTION WORK SERVICES
  • MODULE 3: EXPANSION AND EXEMPTION SCOPE FOR SERVICE TAX ON RENTAL OR LEASING SERVICES
  • MODULE 4: IMPACT OF EXPANDED SCOPE OF SERVICE TAX ON CONSTRUCTION WORK SERVICES, RENTAL AND LEASING SERVICES
  • MODULE 5: ACTION STEPS FOR BUSINESSES
  • MODULE 6: FREQUENTLY ASKED QUESTIONS (FAQ)
INTRODUCTION

Since the gazettement of the legislations regarding the expansion of Sales Tax and Service Tax on 9 June 2025, a number of updates, announcements and policies have been issued by the Ministry of Finance (“MOF”) and the Royal Malaysian Customs Department (“RMCD”).

Significant changes were introduced in 2024, including a widened scope of service tax and an increase in the standard rate from 6% to 8% for selected services. This service tax 2025 expansion, effective 1 July 2025, broadens its scope to include non-essential goods and additional service sectors, with the aim to boost revenue while keeping essentials tax-free. The scope expands further to include major sectors such as leasing, private education, financial services, wellness, medical, and construction. These developments represent a fundamental shift in how SST applies across industries and have far-reaching implications for registration, billing, tax computation, and accounting treatment.

The government plans to collect 6% service tax from 1 July 2025 on construction services for infrastructure, commercial, and industrial buildings, if the taxable value exceeds RM1.5 million annually. However, exemptions are provided for residential buildings, public utilities related to housing, and non-reviewable contracts that will enjoy a 12-month grace period from the effective date. the expanded SST risks destabilising the property sector, especially if the tax is applied retrospectively to existing contracts. Any price hike adjusted to contracts signed prior to the effective date could result in cost overruns, which leaves developers with no choice but to absorb the additional cost

Effective 1 July 2025, rental and leasing services will be subject to 8% service tax under the newly added Group K, Service Tax Regulations 2018. This course will give you important knowledge about a significant change in how construction, rental or leasing operates. In-depth training on the most recent expansion to service tax that directly affect taxpayers and companies is being offered. Proactive planning will help mitigate risks, avoid penalties, and support smooth compliance with the new requirements.

AFTER ATTENDING THIS COURSE YOU WILL RETURN TO YOUR JOB…
  1. Providing a foundational understanding of expanded Sales and Service Tax (SST) 2025 and how it has evolved over the years, especially in response to Malaysia’s shifting economic landscape.
  2. Understanding the changes for sales and service
    tax and being able to understand how construction, rental or leasing related industries should prepare themselves for the changes.
  3. Providing a general understanding of the relevant treatment under service tax legislation and aiming to provide a better general understanding of taxpayer’s obligations.
  4. Understanding how service tax applies across industries and having far-reaching implications for registration, billing, tax computation, and accounting treatment.
WHO SHOULD ATTEND
This course is designed for Employees, IT Managers, Accounts Managers, Directors, Self-Employed or Business Partners who are interested in understanding of Malaysia’s Service Tax its scope and its implications for Businesses and Taxpayers.
METHODOLOGY
Interactive Lectures, Practical Exercises & Discussion on all relevant aspects and implementation of E-Invoicing and Sales and Service Tax to ensure participants grasp clearly aspects presented.
COURSE CONTENT
9:00

MODULE 1: KEY CHANGES IN THE EXPANDED SERVICE TAX EFFECTIVE 1 JULY 2025

  • Overview of service tax
  • The new regulations take effect on 1 July 2025
  • Registration and deregistration requirements: who must register and when
  • Preparing service tax return: filing requirements, due dates and common errors
10.45

MODULE 2: EXPANSION AND EXEMPTION SCOPE FOR SERVICE TAX
ON CONSTRUCTION WORK SERVICES

  • Overview of construction work services
  • Taxable person
  • Threshold value and rate of service tax
  • Scope of Taxable Construction Services
  • Construction Services for mixed development
  • Construction Services for residential buildings
  • Exemption from service tax payment
  • Service tax treatment on construction services within special areas
  • Service tax treatment on construction services within designated area
  • Transitional period
  • Effect of changes in taxable services
  • Treatment of retention sum
  • Liquidated and ascertained damages (LAD)
  • Non reviewable contract
  • Methods of invoice management and issuances
  • Service tax due
12.00

MODULE 3: EXPANSION AND EXEMPTION SCOPE FOR SERVICE TAX
ON RENTAL OR LEASING SERVICES

  • Overview of rental or leasing services
  • Taxable person
  • Scope of taxable rental or leasing services
  • Scope of non-taxable rental or leasing services
  • Exemption from service tax payment
  • Transitional period
  • Effect of changes in taxable services
  • Accounting for service tax on rental or leasing services
  • Master the MyPMK System: Complete Guide to Malaysia’s Micro & Small Business Registration
1:00 Lunch
2:00

MODULE 4: IMPACT OF EXPANDED SCOPE OF SERVICE TAX ON CONSTRUCTION WORK SERVICES, RENTAL AND LEASING SERVICES

  • Register for Service tax with annual turnover exceeding RM1.5 million for construction services.
  • Register for Service tax with annual turnover exceeding RM1.million for rental and leasing services
  • Businesses in newly taxable sectors must assess service tax registration obligations
  • Adjust pricing strategies for non-essential goods and services.
3:00

MODULE 5: ACTION STEPS FOR BUSINESSES

  • Register for Service Tax
  • Understand invoice issuance
  • File Bimonthly Returns (SST02)
  • Late Payment Penalty
  • Seek professional guidance
3:45

MODULES 6: FREQUENTLY ASKED QUESTIONS (FAQ)

  • Service tax on construction work services
  • Service tax on rental or leasing services
5:00 End of Course