Goods from overseas e-commerce platforms will be subjected to a 10% sales tax in 2023.
Pay attention if you frequently shop on Taobao or other international e-commerce sites. The government will impose a 10% sales tax on low-cost items purchased from foreign e-commerce platforms.
In August of this year, the lower house of parliament passed the 2022 Sales Tax Amendment Act in third reading. A 10% tax rate will be paid when purchasing goods priced less than RM500 on overseas e-commerce platforms. These items are subject to a 10% flat rate and no import duties are required.
This measure applies to goods priced less than RM500 that are shipped to Malaysia by air from overseas e-commerce platforms, as well as overseas e-commerce companies with annual sales exceeding RM500,000. The goal of this legislation is to treat local businesses more fairly.
Currently, goods manufactured in Malaysia are subject to sales tax, whereas goods shipped to Malaysia by air from abroad are exempt from the tax. This amounts to encouraging people to buy goods made in other countries.
The implementation of this measure will generate an additional RM200 million in tax revenue for the government each year. If you frequently shop on Taobao, this measure will affect you.
