SST and invoicing in Malaysia (2026): rates, MyInvois, rules

Malaysia does not have a VAT or a GST. It has the Sales and Service Tax (SST): two separate taxes, one on goods and one on services, both administered by the Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia, JKDM). On top of that, the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri, LHDN) is rolling out mandatory e-invoicing through its MyInvois system. This guide explains both for a small business: rates, registration, returns, what an invoice must show, and the e-invoicing dates that apply in 2026. Figures are as of October 2026.

SST at a glance: sales tax and service tax

Service tax rates in 2026:

The scope was widened on 1 July 2025: rental or leasing, construction work, private healthcare, education and fee-based financial services became taxable services, and some previously exempt goods (mainly non-essential and luxury items, such as certain imported premium fish and fruits) became subject to sales tax at 5% or 10%. Beauty services were proposed but withdrawn before the change took effect.

Unlike a VAT, SST is not charged at every stage with a credit for the tax paid on purchases. The SST your suppliers charge you is normally a cost of doing business, so check the exemptions that apply to your sector rather than expecting to reclaim it.

Who must register for SST, and when

• Manufacturers of taxable goods must register for sales tax once their annual sales value passes RM500,000. Below that, they may register voluntarily.
• Service providers must register once the value of their taxable services passes RM500,000 in a 12-month period, which covers most groups of taxable services, including consultancy, training, freight forwarding, parking and smaller hotels. Several services have their own thresholds, for example RM1.5 million for construction work, private healthcare and food and beverage operators such as canteens. Providers below the threshold may register voluntarily.
• Foreign providers of digital services to consumers in Malaysia register once their services pass RM500,000 a year.

You test the threshold in two ways, and you must register if either is met: historically (the current month plus the previous 11 months) or looking forward (the current month plus the next 11 months). Register through the MySST portal of the Customs Department.

Rental or leasing has an extra twist from 2026: rentals to micro, small and medium enterprises with annual sales up to RM1.5 million, registered on the MyPMK system, are exempt from service tax, and newly established MSMEs get a one-year exemption from their registration date.

SST-02 returns and payment

• Return: one SST-02 return for each two-month taxable period, filed even when no tax is due. Sales tax registrants can apply for taxable periods that match their financial year-end.
• Deadline: return and payment by the last day of the month after the taxable period. For a January–February period, that is 31 March.
• When service tax is due: on a payment basis by default, so you account for it when your customer pays. If an invoice is still unpaid after 12 months, the tax becomes due the day after that 12-month period. Accounting on an invoice basis needs written approval from the Director General.
• Late payment penalty: 10% of the tax for the first 30 days, a further 15% for the second 30 days and a further 15% for the third 30 days, up to a maximum of 40% after 90 days.

There is no annual SST return: the bimonthly SST-02 is the whole cycle.

Invoices: what SST law requires

Registered manufacturers must issue an invoice for every sale of taxable goods, and registered service providers for every taxable service. Invoices can be on paper or electronic, and must be in Bahasa Malaysia or English. Under regulation 10 of the Service Tax Regulations 2018, a service tax invoice shows:

1. 1the invoice serial number
2. 2the invoice date
3. 3your name, address and SST registration number
4. 4a description that identifies the taxable services
5. 5any discount offered
6. 6the total excluding service tax, the rate of service tax and the total service tax, shown separately
7. 7the total including service tax

Foreign currency: any amount in a currency other than ringgit must also be shown in ringgit, converted at the selling rate of exchange in Malaysia when the service is provided.

Corrections: you may not alter an issued invoice. If it is wrong, void the original and all its copies by marking them “CANCELLED” and keep them for audit, then issue a correct one. When the value changes after the sale, issue a credit note (the value falls or the sale is cancelled) or a debit note (the value rises). The note must be clearly titled, numbered and dated, name both parties, give the reason, describe the services with quantities and amounts, show the amount before tax, the rate and the tax, and quote the number and date of the original invoice. You then adjust the next SST-02 return.

Record keeping: keep your records for seven years, in Bahasa Malaysia or English, in Malaysia unless the Director General allows otherwise. Paper or digital copies are both accepted.

MyInvois: e-invoicing in Malaysia

E-invoicing is an income tax measure run by LHDN, separate from SST. An e-invoice is submitted to LHDN for validation before it goes to the buyer: LHDN checks it, assigns an IRBM Unique Identifier Number, and the visual copy you send the buyer carries a QR code linking to the validated record. You can submit invoices through LHDN’s MyInvois Portal (form by form or by spreadsheet upload) or through an API connected to your own system. The format has 55 data fields.

Implementation dates (based on turnover in the 2022 financial statements or tax return):

Who is exempt: the e-Invoice Guideline (version 4.8, 30 August 2026) exempts taxpayers with annual turnover or revenue below RM3 million. The exemption threshold has been raised several times, most recently from RM1 million, which was set in December 2025. It does not apply if you have a non-individual shareholder, holding company, related company or joint venture with turnover of RM3 million or more. New businesses that started between 2023 and 2025 with turnover of at least RM3 million had to start on 1 July 2026.

Interim relaxation: for Phase 4 (turnover up to RM5 million), the relaxation period runs until 31 December 2027. During it you may issue consolidated e-invoices for all transactions, put free-text details in the description field, and decline requests for individual e-invoices, and LHDN has said it will not prosecute non-compliance as long as you submit the consolidated e-invoices. A special voluntary disclosure programme from 7 July 2026 to 31 December 2027 lets businesses submit missed or incorrect e-invoices without penalties, provided they act in good faith.

Rules worth knowing:

• Sales to consumers: you may issue a monthly consolidated e-invoice for B2C sales where the buyer does not ask for an e-invoice, within seven calendar days after the month ends. Since 1 January 2026, any single transaction above RM10,000 needs its own e-invoice.
• Mistakes: the buyer can reject, or you can cancel, a validated e-invoice within 72 hours. After that, corrections are made with a credit note, debit note or refund note e-invoice.

Calculation example in ringgit

A registered consultancy issues these invoices in one taxable period:

On the SST-02 return for the period, the service tax due is RM1,780 for invoices your clients have paid (payment basis). There is no “output minus input” step: the RM400 of service tax your own IT supplier charged you is a cost, not a credit. To find the tax inside a price that already includes it, multiply by the rate and divide by 100 plus the rate: RM1,080 × 8 ÷ 108 = RM80.

A registered manufacturer works the same way with sales tax: goods sold for RM5,000 at 10% carry RM500 of sales tax, and the invoice total is RM5,500.

Common mistakes

1. 1Charging SST before you are registered, or not registering when the rolling 12-month figure passes RM500,000.
2. 2Using the wrong rate for a service that moved, such as rental or leasing, which went from 8% to 6% from 1 January 2026.
3. 3Altering an issued invoice instead of cancelling it or issuing a credit or debit note.
4. 4Showing amounts only in foreign currency. The ringgit amount must also appear.
5. 5Assuming the e-invoice exemption applies when your group’s turnover takes you over RM3 million.
6. 6Paying late. The penalty climbs every 30 days, up to 40%.

How Clientlly helps

Clientlly numbers your invoices sequentially per series and puts your country’s SST rates on every invoice, with credit notes linked to the original invoice. You can issue invoices in multiple currencies, add a card payment link, see when a client opened the invoice, and let automatic reminders go out 3, 14 and 30 days after the due date. Receipts you scan have the tax read automatically, sales and purchase tax books are kept per rate, and tax reports, with Excel and PDF exports, are ready for you and your accountant. See invoicing and accounting.

Clientlly is not connected to MyInvois. If you are in scope for e-invoicing, you need a solution that submits your invoices to LHDN for validation, or LHDN’s own MyInvois Portal.