The Royal Malaysian Customs Department (RMCD) issued an update to Service Tax Policy 4/2024 (Amendment No 1) (dated August 23, 2024) in relation to logistics services, which is effective March 1, 2024.
The updates include:
- All logistics services under Group J, First Schedule of the Service Tax Regulations 2018, provided by persons within/between designated and special areas are not subject to service tax. However, any person whose principal place of business is located in Malaysia and provides logistic services in a designated or special area, or any person whose principal place of business is located in a designated or special area and provides logistic services to customers whose principal place of business is in Malaysia, are subject to service tax.
- The conditions for the service tax exemption for door-to-door delivery services have been updated.
- Logistics services related to transit activities (i.e., goods that arrive from a place outside Malaysia without being break bulk and then to another place outside Malaysia through land/sea/air transport) are exempt from service tax pursuant to Section 34(3)(a) and 34(4) of the Service Tax Act 2018.
Read an August 2024 report prepared by the KPMG member firm in Malaysia