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Import Duty and Sales Tax
The Malaysian government uses tax exemptions as a key fiscal tool to attract investment, foster business growth, and drive the development of strategic sectors. These exemptions—particularly relevant to the manufacturing, technology, and export-oriented industries—include Import Duty Exemptions and Sales Tax Exemptions, aimed at reducing the financial burden for businesses engaged in production, export, and technological development.
Import Duty
Import duty is levied on goods entering Malaysia, with rates ranging from 0% to 60%, depending on the product category. Certain industries or equipment may qualify for exemptions. Eligible companies can apply for duty exemptions when importing production machinery, raw materials, or specific components—significantly reducing initial capital expenditure. For instance, a qualified manufacturing company may import production equipment with reduced or zero duties, easing the setup cost.
Sales Tax
Sales tax applies to imported and locally manufactured finished goods, typically at 5% or 10%, with some items subject to special rates. For manufacturing businesses, sales tax exemptions can reduce procurement costs and improve cash flow. For example, a company importing essential raw materials for production may be exempted from sales tax under certain conditions, directly lowering operational expenses.
The Malaysian Investment Development Authority (MIDA) plays a pivotal role in promoting investment and offers tax exemptions and incentives to qualifying businesses. Among these, Import Duty Exemption is a major incentive offered by MIDA and applies to the following categories:
- Raw Materials and Components: Used directly in the manufacturing process, from initial production to final packaging.
- Machinery and Equipment: Essential tools used throughout the production cycle.
- Production Aids: Items used to enhance or accelerate manufacturing processes.
We provide professional services for Malaysia import duty and sales tax exemptions:
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Personalized eligibility assessments for exemptions
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Preparation and drafting of required application documents
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Liaison with authorities to resolve application issues
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Compliance guidance post-approval to ensure long-term benefit
Malaysia Office：Suite 1, Level 23, Menara KOMTAR, 80888 Ibrahim International Business District, Johor Darul Ta‘zim, Malaysia
Tel：+607 272 5827
E-mail：enquiry@fozl.sg
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