When to Register and Start Charging Service Tax for Rental or Leasing Services

Published: 29 August 2025

As a landlord/ lessor providing rental or leasing services, it’s important to understand when you are required to register for Service Tax (SST) and begin charging the 8% SST.

1. The Effective Date of Service

From the first day you start your rental or leasing service, you must calculate the total taxable value for:

• The current month plus the next 11 months
• This is a 12-month projection e.g. based on a signed tenancy agreement

This check is carried out on a rolling 12-month basis - meaning you must keep monitoring it every month, even if you do not initially cross the threshold of RM 1,000,000.

2. The RM 1,000,000 Threshold

If your projected taxable value in any given month exceeds RM 1,000,000:

• You are liable to be registered for SST by the last day of the following month under Section 12 of the Service Tax Act 2018
• Once registered, you are required to start charging 8% service tax from the effective date of registration

Example Timeline:

Date	Chronology of Event
1 July 2025	Start of rental or leasing service
1 Aug 2025	Projected taxable value expected to exceed RM1,000,000
31 Aug 2025	Deadline to apply for registration
1 Sept 2025	Start charging 8% service tax

3. Why This Matters to Entrepreneurs

Failing to register on time can result in penalties and backdated tax liabilities. By monitoring your taxable value monthly, you can:

• Stay compliant with SST regulations
• Avoid unexpected tax bills
• Maintain trust with your customers

💡 Pro Tip for SMEs: Even if your revenue fluctuates, always keep a simple monthly tracking sheet. This ensures you’ll spot the threshold crossing early and act before the deadline.

How YYC Can Help

YYC’s tax professionals are ready to guide your business through this SST expansion with:

• ✅ SST Registration & Readiness Review
• ✅ SST Classification of Goods & Services, & B2B exemption/ intragroup relief
• ✅ Custom ruling / Sales tax exemption application
• ✅ Internal SST Training for Finance Team
• ✅ Ongoing SST Compliance Consultation

Book a consultation with YYC today and ensure your business is 100% SST-ready.