SST Registration Thresholds by Service Group

Almost every guide answers “what is the SST registration threshold?” with RM500,000. For a law firm, that is right. For a private hospital, a contractor, a landlord, a school or a restaurant, it is wrong — and in two of those cases it is wrong in the direction that makes you register years late.

The threshold lives in column (3) of the First Schedule to the Service Tax Regulations 2018, group by group. There is no national figure.

What is the threshold for each group?

Group	Services	Threshold
A	Accommodation	RM500,000
B	Food and beverage	RM1,500,000
C	Night-clubs, dance halls, cabarets, wellness centres, massage parlours, public houses and beer houses	RM500,000
D	Private clubs	RM500,000
E	Golf clubs and driving ranges	RM500,000
F	Betting and gaming	RM500,000
G	Professionals	RM500,000
H item 1	Credit and charge cards	Nil
H items 2–4	Insurance and takaful, fee-based financial services, Labuan financial services	RM1,000,000
I items 1–13	Other service providers — advertising, brokerage, employment, security, courier, parking, motor servicing and others	RM500,000
I items 14–16	Private healthcare, traditional and complementary medicine, allied health	RM1,500,000
J	Logistic services	RM500,000
K	Rental or leasing	RM1,000,000
L	Construction works	RM1,500,000
M	Education	Nil

Two of those deserve a second look.

Nil is not a typo. Group M education and Group H item 1 credit cards have no threshold at all. A private school charging more than RM60,000 per student per academic year, or a bank activating a single credit card, is liable from the first supply. The RM60,000 figure in Group M is a fee test that defines the taxable service — it is not a registration threshold, and reading it as one is the standard error in education-sector guidance.

RM1,000,000 replaced RM500,000 late. Group K and Group H items 2 to 4 were gazetted at RM500,000 on 9 June 2025 and amended to RM1,000,000 by P.U.(A) 201/2025 on 30 June 2025 — one day before commencement. Guidance published in that three-week window quotes the superseded figure.

How is the twelve-month period measured?

Section 12(2) of the Service Tax Act 2018 gives two tests, and you are liable at whichever comes first:

• The historical test. At the end of any month, where the total value of all your taxable services in that month and the eleven months immediately preceding it has exceeded the prescribed threshold.
• The prospective test. At the end of any month, where there are reasonable grounds for believing that the total in that month and the eleven months immediately succeeding it will exceed the threshold.

This is a rolling test, not a financial-year test. It is re-run at the end of every month. A business that reviews turnover annually will discover its liability an average of six months late.

The prospective test is the one people forget exists. Sign a three-year lease at RM40,000 a month and you have reasonable grounds to believe you will exceed RM1,000,000 within twelve months — liability arises immediately, not after you have actually banked the money.

The trap: exempted revenue still counts

This is the single most costly misunderstanding in the regime, and it follows from how the reliefs are drafted.

Every concession in the 2025 expansion — the B2B exemption, the non-reviewable contract relief, the MSME tenant exemption, group relief on rental, the exemption for Malaysian citizens in private healthcare — is granted under section 34 of the Service Tax Act 2018, and every Service Tax Policy says so in its opening line: the Minister exempts the payment of service tax.

An exemption from payment does not remove the service from the First Schedule. The supply is still a taxable service. And s.12(2) measures the total value of all his taxable services — not the value on which tax was actually paid.

So:

• A private hospital with RM900,000 of foreign-patient revenue and RM4,000,000 of Malaysian-patient revenue is over the RM1,500,000 threshold, even though it charges tax on almost none of it.
• A landlord whose tenants are all MyPMK-registered MSMEs still has to count that rent toward RM1,000,000.
• A contractor working entirely under pre-July-2025 non-reviewable contracts still counts that work toward RM1,500,000.

The practical consequence is that businesses in these positions must register, file SST-02 returns, and declare the exempt supplies — while remitting little or no tax. Registration and payment are different obligations, and only the second is relieved.

Group G aggregates; other groups do not

Group G carries a note the other groups do not. A Group G taxable person is liable for registration once the total value of taxable services, whether combined or singly, exceeds RM500,000 across any one or more Group G services.

So a firm providing legal services of RM300,000 and consultancy of RM250,000 crosses the line at RM550,000, even though neither service alone reaches RM500,000.

That aggregation does not extend across groups. A business with RM400,000 of Group G professional fees and RM800,000 of Group K rent tests RM400,000 against RM500,000 and RM800,000 against RM1,000,000 — and registers for neither. Once registered for any group, however, you charge tax on every taxable service you provide.

You cannot split the business

Section 15 gives the Director General power to direct that two or more persons be treated as a single taxable person where he is satisfied that the separation of business activities is artificial. Subsection (2) says the test is the extent to which the persons are closely bound to one another by financial, economic and organizational links.

The direction can specify the date from which the single taxable person is treated as carrying on the business and the date from which it must be registered. Splitting a restaurant group into per-outlet companies to stay under RM1,500,000 is the textbook case.

Registering, and what happens if you are late

Under s.13(1) you must apply not later than the last day of the month following the month in which you became liable. Applications go through the MySST portal.

Section 13(3) then registers you with effect from the first day of the month following the month you applied — or an earlier agreed date, but never earlier than the date liability arose.

Miss the deadline and s.13(4) applies: the Director General registers you on whatever date he determines, provided it is not earlier than the date you became liable. In practice that means backdating. You then owe tax on supplies made since that date, whether or not you charged it to your customers — and s.13(5) makes the failure an offence in its own right.

Section 14 allows voluntary registration for those below the threshold. It is occasionally worth it for credibility with corporate customers, but there is no input tax credit in this regime, so voluntary registration adds cost and compliance without recovering anything.

Sales tax registration is a different test

Sales tax registration has nothing to do with your service tax position.

The threshold is RM500,000, set by the Sales Tax (Total Sale Value of Taxable Goods) Order 2018, and it was not changed in 2025. It applies to manufacturers of taxable goods in Malaysia, tested on the sale value of the goods you manufacture — not on total turnover. Sub-contract manufacturers test the value of work performed. Importers do not register: import sales tax is collected at customs clearance.

Section 12(2) of the Sales Tax Act 2018 uses the same historical and prospective twelve-month structure.

Some manufacturers are exempt from registration whatever their turnover under the Sales Tax (Exemption from Registration) Order 2018 — including ready-mixed concrete, preparation of meals, photocopying, engraving, photo developing and the incorporation of goods into buildings.

Common mistakes

• Quoting RM500,000 as the answer. It is right for roughly half the groups and wrong for the rest, including the three largest new ones.
• Reading RM60,000 as the education threshold. Group M has a nil threshold; RM60,000 per student defines which institutions are taxable under item 1.
• Testing turnover annually. Section 12(2) is a rolling monthly test.
• Ignoring the prospective test. Signing a large contract can create liability before any money arrives.
• Excluding exempt revenue from the threshold calculation. Exemption under s.34 relieves payment, not scope.
• Aggregating across groups. Only Group G aggregates internally.
• Assuming sales tax follows service tax. Two Acts, two thresholds, two registrations.

What’s next

Identify every group your revenue touches, then run each one against its own threshold on a rolling twelve-month basis with exempt revenue included. If you crossed a line in a past month, work out the date liability arose before you apply — that date, not the application date, drives what you owe.

Once registered, the mechanics move to taxable periods, SST-02 returns and the late-payment penalty regime. If you buy services from suppliers outside Malaysia, check the imported taxable services rules as well: those apply whether or not you are registered.