Essential Guide to the Malaysia Import Tax

How Much is The Import Duty in Malaysia

The import duty in Malaysia can vary depending on the imported goods. Here’s a breakdown:

Import Duty:

• Average rate: 6.1% for industrial goods.
• Specific rates: Depending on the goods’ Harmonised Systems (HS) code.
• Exemptions: These are available for certain goods under particular conditions.

Sales & Service Tax (SST):

• Rate: 10% for most goods.
• 5% rate: Applies to some essential goods.
• Specific rates: For certain goods like cigarettes and alcohol.

Here are some examples of import duties and SST for everyday items:

Please note that these are just examples, and the actual import duty and SST for your specific goods may vary. It’s best to consult the Royal Malaysian Customs Department or a customs broker for the most accurate information.

Here are some helpful resources:

• Royal Malaysian Customs Department: http://www.customs.gov.my/en
• Malaysia – Import Tariffs: https://www.export.gov/apex/article2?id=Malaysia-Import-Tariffs

What is the Import Tax for Malaysia – Above RM500

Low-Value Goods (LVG): From 1 January 2023, LVG not exceeding RM500 sold online by sellers abroad and delivered to consumers in Malaysia are subject to sales tax. However, the implementation of this tax was delayed, and it will be enforced starting 1 April 2023.

Goods above RM500 are subject to both import tax and SST.

1. Import tax:

• The average rate is 6.1% for industrial goods but can vary depending on the product’s Harmonized System (HS) code.
• Calculated on an ad valorem basis: a percentage of the good’s value.
• Specific rates may apply to particular products.
• Exemptions: These are available for some goods, such as raw materials and machinery.

2. Sales & Service Tax (SST):

• A flat rate of 10% applies to most goods imported into Malaysia, including LVG exceeding RM500 (as of 1 April 2023).
• Reduced rate of 5% for certain essential goods like food, beverages, and books.
• Specific rates may apply to particular products.
• Exemptions: These are available for some goods, such as exports and goods manufactured in designated economic zones.

Here’s an example:

Suppose you import a non-essential good with a value of RM1000. The import tax would be calculated as follows:

Import Duty: RM1000 * 6.1% = RM61

SST: RM1000 * 10% = RM100

Total Import Tax: RM61 + RM100 = RM161

How Much is Sales Tax in Malaysia Customs

For customs purposes, the Sales & Service Tax (SST) in Malaysia is 10% for most goods, including Low-Value Goods (LVG) exceeding RM500, imported from 1 April 2023 onwards. However, some exceptions exist:

• 5% SST: Applies to certain essential goods like food, beverages, and books.
• Specific rates May apply to particular products.
• Exemptions: These are available for some goods like exports and goods manufactured in designated economic zones.

Here’s a breakdown:

General rate: 10% Reduced rate: 5% (for specific goods) Specific rates: May apply to particular products Exemptions: Available for some goods

Important points to remember:

• LVG with invoices issued before 1 April 2023: These are not subject to SST, regardless of the delivery date.
• Specific product information: The SST rate depends on the product’s HS code.

How to Calculate Customs Duty in Malaysia

Calculating customs duty in Malaysia involves two main components: Import Duty and Sales & Service Tax (SST). Here’s how you can calculate each:

1. Import Duty:

• Identify the Harmonized System (HS) code: This code classifies your product and determines its import duty rate. You can find the HS code online or by contacting the Royal Malaysian Customs Department.
• Calculate the CIF value: This is your goods’ cost, Insurance, and Freight value. It includes the purchase price, insurance costs, and freight charges.
• Multiply the CIF value by the import duty rate. This will give you the amount of import duty payable.

Example:

• You import a product with an HS code of 8528.12.90 with a CIF value of RM1000.
• The import duty rate for this HS code is 6.1%.
• Import duty = RM1000 x 6.1% = RM61

2. Sales & Service Tax (SST):

• Apply the appropriate SST rate:
  • 10%: Most imported goods exceeding RM500 and services provided in Malaysia.
  • 5%: Certain essential goods, such as food and beverages.
  • Specific rates May apply to certain products.
• Multiply the CIF value by the SST rate: This will give you the amount of SST payable.

Example:

• You import the same product with a CIF value of RM1000.
• The SST rate is 10%.
• SST = RM1000 x 10% = RM100

Total Customs Duty:

• Import duty + SST = RM61 + RM100 = RM161

Import Taxes for LVG (Low-Value Goods):

• For LVG exceeding RM500 imported from 1 April 2023: Only SST applies at a flat rate of 10%.
• For LVG with invoices issued before 1 April 2023: No SST is applicable, regardless of the delivery date.

Additional notes:

• This is a simplified overview, and the specific rates and exemptions may vary.
• You can find detailed information about import duty and SST rates on the Royal Malaysian Customs Department website: http://www.customs.gov.my/en
• Consulting a customs broker or professional is recommended for assistance with specific import taxes and regulations.

How Do I Pay Customs Fees in Malaysia

There are several ways to pay customs fees in Malaysia, depending on the type of goods you are importing and the value of your shipment. Here are the most common methods:

1. Online Payment:

• Customs Trade Automated Processing System (CTAP): This is the preferred method for paying customs fees for commercial imports. You can register for a CTAP account and make payments through online banking.
• Customs Online Payment Gateway (COPG): This online payment option is available for individuals and businesses. You can access COPG through the Royal Malaysian Customs Department website.

2. Payment at Customs Counter:

• Debit/Credit Card: You can pay by debit or credit card at designated customs counters at the entry port.
• Cash: Payment in cash is also accepted at customs counters, but it is generally limited to smaller amounts.

3. Bank Transfer:

• Customs Duty Collection Account: You can transfer to the designated Customs Duty Collection Account at any bank in Malaysia. The account details will be provided on your customs clearance documents.

4. Payment through Agent:

• Customs Broker/Agent: If you use a customs broker or agent to handle your import clearance, they can pay on your behalf.

Here are some additional things to keep in mind:

• Payment must be made in Malaysian Ringgit (MYR).
• When paying, you must provide your customs clearance documents (e.g., Customs Declaration Form).
• Keep a copy of your payment receipt for your records.
• The deadline for payment will be indicated on your customs clearance documents.

Here are some helpful resources:

• Royal Malaysian Customs Department website: http://www.customs.gov.my/en
• Guide on Payment of Tax: http://www.customs.gov.my/en/faq/Pages/faq_pym.aspx
• Customs Clearance in Malaysia: https://www.dhl.com/discover/en-my/faq/customs/custom-clearance-malaysia

It is always best to consult with a customs broker or professional if you have any questions or need assistance with paying customs fees in Malaysia.

Who Should Pay SST in Malaysia