Malaysia: Sales Tax On Low Value Goods (LVG)

“Low Value Goods (LVG)” refers to all goods which are sold at a price not exceeding RM500 and are brought into Malaysia by land, sea or air excluding:

1. cigarettes;
2. tobacco products;
3. intoxicating liquors;
4. smoking pipes (including pipe bowls);
5. electronic cigarettes and similar personal electric vaporizing devices; and
6. preparation of a kind used for smoking through electronic cigarette and electric vaporizing device, in forms of liquid of gel, whether or not containing nicotine.

Sales tax on LVG shall be charged and levied at the rate of 10%. The sales tax is charged on the sale value of LVG not including any tax, duty, fee or other charges such as transportation, insurance or other costs.

Seller consists of:

1. Local and Overseas Seller, who sells LVG on an online platform directly to consumers
2. Local and Overseas online marketplace operators

Any seller with the total sale value of LVG brought into Malaysia by land, sea or air mode in 12 months exceeds RM500,000 is liable to be registered.

Registered seller will be assigned a taxable period for which he is required to account for tax in his return to be furnished to the Director General. The taxable period shall be a period of 3 months ending on the last day of any month of any calendar year.

Registered seller is required to pay the amount of sales tax due and payable not later than the last day of the month following after the end of taxable period. 

The penalty is imposed on part or all of the amount of sales tax that remains unpaid after the last day the tax is due and payable. The penalty imposed is as follows:

Reference/ Citation
Official Portal of Royal Malaysian Customs Department (RMCD)

‍https://mylvg.customs.gov.my/Legislation