The 10% sales tax on low value goods (LVG or goods at a price of less than RM500 each) will go into effect next year.
The implementation of the sales tax is scheduled for 1 January 2024. To clarify, if any LVG purchases are made before 1 January 2024, they will not be subject to the new 10% sales tax, even if the items are delivered after this date, according to Malay Mail.
In essence, if the registered seller confirms the LVG order before 1 January, the new sales tax will not be applicable, even if the goods are shipped from overseas to the customer in Malaysia after 1 January.
However, if the registered seller confirms the LVG order on or after January 1, the new sales tax on LVG will be enforced.
The sales tax is applicable to online sales of items shipped from abroad to customers in Malaysia, encompassing duty-free islands such as Labuan, Langkawi, Tioman, and Pangkor, as well as special areas like free zones or licensed warehouses.
The sales tax specifically targets imported products sold online in Malaysia. Items manufactured within the country are exempt from this tax.
This tax is applicable to all online sellers, irrespective of their location (whether in Malaysia or overseas), engaged in LVG sales on online platforms or operating online marketplaces facilitating LVG transactions.
The tax is applicable to all online sales below RM500 each, transported into Malaysia by land, sea, or air, excluding imported alcohol or smoking products.
Items exempt from LVG sales tax include intoxicating liquors, cigarettes, tobacco products, smoking pipes (including pipe bowls), e-cigarettes or vaping devices, and e-cigarette or vaping liquid or gel, regardless of nicotine content.
