Sales Tax Policies and Revised Guide on Sales Tax Exemption

The Royal Malaysian Customs Department (“RMCD”) has issued the following Sales Tax policies in respect of Sales Tax exemptions granted by the Minister of Finance:-

1) Sales Tax Policy 1/2025 – Sales Tax Exemption on Motorcycles 

Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars, with internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc, classified under tariff codes 8711.20.96 00 and 8711.20.99 00 imported or manufactured locally by a registered manufacturer are exempted from Sales Tax, effective 27 September 2025. 

2) Sales Tax Policy 2/2025 – Sales Tax Exemption on the Importation of Soya Beans

The importation of soya beans, whether or not broken, classified under tariff codes 1201.10.00 00 and 1201.90.00 00 are exempted from Sales Tax, effective 1 July 2025. 

As the exemption takes effect retrospectively, any payment of Sales Tax on these goods are eligible for refund, subject to meeting conditions under Section 39 of the Sales Tax Act 2018. Applications must be made using JKDM No. 2 Form and be submitted to the Technical Service Division of the RMCD at the respective state office no later than 30 November 2025.

Meanwhile, the RMCD also issued a revised Guide on Sales Tax Exemption under Item 33A, 33B, 55, 63, 64 & 65, Schedule A, Sales Tax (Persons Exempted from Payment of Tax) Order 2018 (dated 26 September 2025) mainly to update the list of machinery, equipment and spare parts eligible for exemption.  The revised Guide also removed a footnote in Appendix 1 where it was stated that approval for Sales Tax exemption may be granted if the RMCD officer can verify and is satisfied that such goods are directly used in the manufacturing of finished goods.

Please click on the above header links for a copy of the Sales Tax Policies and Revised Guide (available only in English language) for further information.

Evelyn Lee
Partner
evewflee@kpmg.com.my
+603 7721 2399

Crystal Chuah Yoke Chin
Associate Director
ycchuah@kpmg.com.my
+603 7721 2714

Regina Lau
Partner
reglau@kpmg.com.my
+603 7721 2188

Titus Tseu
Executive Director 
titustseu@kpmg.com.my
+603 7721 2822

Ng Fie Lih
Partner 
flng@kpmg.com.my
+603 7721 2514