The Royal Malaysian Customs Department (RMCD) released an update to the Service Tax Policy 4/2024 (Amendment No 1) on 23 August 2024 concerning logistics services, which went into force on 1 March 2024.
All logistics services under Group J (First Schedule of the Service Tax Regulations 2018) provided within and between special areas / designated areas or between special areas and designated areas or vice versa are not subject to service tax. However, logistics services provided by any person whose main place of business is located in Malaysia and provides logistics services in a designated area or a special area or any person whose main place of business is located in a designated area or special area and provides logistics services to customers whose main place of business is located in Malaysia are subject to service tax.
Logistics services related to transit activities (i.e., goods that arrive from a place outside Malaysia without being break bulk and then to another place outside Malaysia through land/sea/air transport) are exempt from service tax pursuant to Section 34(3)(a) and 34(4) of the Service Tax Act 2018.
The delivery service provider is also exempt from Service Tax exemption when using services of a third party for the provision of the delivery services.
