Reduction of Service Tax for Rental and Leasing Services from 8% to 6% formalised
The Prime Minster, Dato’ Seri Anwar Ibrahim, announced several initiatives in relation to sales and service tax on 5 January 2026. One of these initiatives was the reduction of the rate of service tax for the provision of rental or leasing services from 8% to 6% commencing 1 January 2026.
On 23 January 2026, the Royal Malaysian Customs Department issued the Service Tax Policy No. 2/2025 (Amendment No. 3) which, among others, granted a service tax exemption of 2% on rental or leasing services from 1 January 2026 until amendments to the relevant subsidiary legislation have been gazetted.
