On March 29, 2024, the Royal Customs of Malaysia issued updated guidelines pertaining to Service Tax for specific business sectors, which include:
Group A: Accommodation
Group B: Food and Beverages
Group C: Night Clubs, Dance Halls, Cabarets, Health and Wellness Centres, Massage Parlours, Public Houses, and Beer Houses
Group D: Private Clubs
Group E: Golf Clubs and Golf Driving Ranges
As per these guidelines, entities falling within the aforementioned groups are required to levy Service Tax on the designated services at the prevailing tax rates as described below:
| Category | Tax Rate |
|---|---|
| The preparation or sale of Cigarettes, tobacco products, tobacco pipes (including pipe heads), electronic cigarettes and similar personal electric vaporization devices, preparations used for smoking by means of electronic cigarettes and electric vaporization devices, in liquid or gel form, whether containing nicotine or not. | 8% |
| The preparation or sale of alcoholic drinks (including temperance drink) | 8% |
| The preparation or sale non-alcoholic beverages (ready-to-drink beverages in bottles / packs / cans / boxes and the like) | 6% |
Starting from March 1, 2024, the tax rates for various services provided by registered persons of Groups A, B, C, D & E have been revised:
- Alcoholic beverages provided with meals and drink packages are taxed at 6%.
- Other service charges for food and drink preparation, like corkage fees, are taxed at 8%.
- Preparation or sale of snacks and fruits are exempt from service tax.
- Service charge itself is not taxed.
Any service tax collected from customers for these services since March 1, 2024, must be remitted to the Royal Malaysian Customs Department according to Section 26 of the Service Tax Act 2018. No refunds will be issued for service tax paid on these specified services after March 1, 2024.