• 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)

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.

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.