Exemptions

Last updated: July 9, 2026

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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:

ScheduleWho / what it covers
Schedule AClass of person: the government, rulers, and certain bodies
Schedule BManufacturers of specific non-taxable goods
Schedule CRegistered 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.

Handling exemptions in Cloudby. Cloudby applies whatever rate the tax group carries, so an exempt or zero-rated line uses a 0% tax group. When e-Invoicing is on, attach the exemption reason so it is reported to MyInvois. See Tax groups.
Always confirm with RMCD. SST rates, scope and thresholds have moved several times. This page reflects the position as of early 2026; verify the current rules on the MySST portal (RMCD) before you rely on a figure.

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