This is the rules reference. For how it works in the software, see Tax groups in the reference, or the how-to Set up taxes.
SST carries a broad set of exemptions, especially on the Sales Tax side. Applying one usually means charging a zero rate and keeping the paperwork that justifies it.
Sales Tax exemptions
The Sales Tax (Persons Exempted from Payment of Tax) Order sets out three schedules:
| Schedule | Who / what it covers |
|---|---|
| Schedule A | Class of person: the government, rulers, and certain bodies |
| Schedule B | Manufacturers of specific non-taxable goods |
| Schedule C | Registered manufacturers acquiring raw materials, components and packaging for their taxable goods |
Separately, the Goods Exempted from Sales Tax Order lists goods that carry no Sales Tax at all (many basic and essential items).
Designated and special areas
Supplies to and within certain areas are treated specially: Designated Areas (Labuan, Langkawi, Tioman, Pangkor) and Special Areas (Free Zones, Licensed Manufacturing Warehouses, bonded warehouses, the Joint Development Area) can be outside the normal Sales Tax charge. Exports are likewise not subject to Sales Tax.
Service Tax relief
The main Service Tax relief is the intra-group (business-to-business) exemption, which stops the same service being taxed twice within a corporate group where the conditions are met. Specific services carry their own exemptions.
Related
- Reference: Sales Tax vs Service Tax
- Handbook: e-Invoice scope & exemptions
- How-To: Set up taxes in Cloudby