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Malaysia: Service tax policy on constructions works

Applies retroactively from July 1, 2025

June 22, 2026

The Royal Malaysian Customs Department issued Service Tax Policy 2/2026 – Service Tax Treatment on Construction Works Services Carried Out on Completed Residential Buildings (dated June 18, 2026), which applies retroactively from July 1, 2025.

The policy provides that, subject to meeting conditions, construction works services carried out on residential buildings that have been completed are exempted from service tax prior to amendments to the Service Tax Regulations 2018.

Read a June 2026 report prepared by the KPMG member firm in Malaysia

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