From April, the government will impose a 10% sales tax on online purchases of imported goods worth less than RM500.
According to the draft Lower Value Goods (LVG) Sales Tax Guidelines (Version 1) issued by the Royal Malaysian Customs Board website, the LVG sales tax will come into effect on January 1, 2023 and eligible sellers will need to register from the effective date. However, the LVG sales tax will only be collected from April 1.
What is Lower Value Goods (LVG) Sales Tax?
Lower Value Goods (LVG) are goods from outside Malaysia sold at online stores for less than RM500 and brought into Malaysia by sea, air, or land. It includes importing from special areas such as Labuan, Tioman Langkawi, Pangkor Island, and the Free Zone.
LVG sales tax is levied on the price of the goods and will not include the cost of shipping and insurance and any other taxes or duties that are payable on the sale of the goods.