The Implications of 10% Sales Tax on Low Value Goods (LVG) in Malaysia

A new sales tax policy has been officially implemented in Malaysia as of January 1, 2024, which stipulates that Low Value Goods (LVG) sold online with a value not exceeding MYR 500 will be subject to a sales tax rate of 10%. In this article, we will provide an overview of the registration requirements and responsibilities for sellers and foreign shippers who engage in LVG transactions within Malaysia.

1. What are Low Value Goods (LVG)?

Low Value Goods (LVG) refers to goods at a selling price not exceeding MYR 500 and brought into Malaysia via land, sea, or air. 

Exclusions include: cigarettes, tobacco products, intoxicating liquors, smoking pipes, electronic cigarettes, and preparations used for smoking through electronic devices.

2. What are the additional customs requirements for LVG Importation?

During the import declaration, you are required to provide LVG Sales Tax Number if you have met ALL of the below situations:

• You are a shipper, whether inside or outside Malaysia, who sells LVG on an online platform.
• The total sale value of LVG brought into Malaysia exceeds MYR 500,000 in 12 months.

3. How to register for the LVG scheme?

The registration should be done with the Royal Malaysian Customs Department (RMCD) using the LVG-01 form via MyLVG.

4. How to submit a tax return for the LVG scheme?

The tax return should be submitted every 3 months according to the taxable period using the LVG-02 form via MyLVG.

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