Key Highlight - Service Tax Policy No.2/2025 (Amendment No.3) Dated 23 January 2026

The Royal Malaysian Customs Department (RMCD) has released several updates to the service tax treatment on rental or leasing services under Group K, in line with the New Year Message delivered by the Prime Minister of Malaysia.

These updates provide additional relief measures for Micro, Small and Medium Enterprises (MSMEs), particularly newly established businesses, and take effect from 1 January 2026.

1. Updated Conditions for Service Tax Exemption for MSME Tenants
2. Service Tax Rate Reduction for Rental or Leasing Services
3. Service Tax Exemption for Newly Established MSME Tenants

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