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Service Tax Policies (STP) on Digital Services

STP No. 1/2022 dated 1 August 2022

On August 1, 2022, the Royal Malaysian Customs Department announced the Service Tax Policy 1/2022 (only available in the Malay language) on the service tax exemption on providing digital payment services by local non-bank providers.


This amendment came into effect on the first day of August 2022.


This policy exempts digital payment services from the payment of service tax under Section 34(3)(a) of the Service Tax Act 2018 for the following local non-bank service providers ("LNBSP")

  • Local non-bank payment instrument issuers;

  • Local non-bank merchant acquirers; and

  • Local non-bank payment system operators.

The exemption is effective from 1 August 2022 to 31 July 2025.


This exemption does not apply to foreign service providers or other digital services except for digital payment services rendered by the LNBSP mentioned above.


139.1 Exemption for Digital Payment Services by Local Non-Bank Service Providers
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STP No. 10/2020 (Amendment No. 2) dated 1 August 2022

In addition, the RMCD has published the Amendment to Service Tax Policy 10/2020 (Amendment No 2) (dated 1 August 2022) regarding Service Tax exemption on the provision of digital services connected to banking or financial services (only available in the Malay language).


This amendment came into effect on the first day of August 2022. The Amendment includes the following:

  • the end date of the service tax exemption is from 1 January 2020 until 31 July 2025 concerning digital services related to banking/financial services provided by local service providers

  • in paragraph 4.1 of the Service Tax Policy, the word "and" has been replaced with the word "or." The new paragraph is now read as follows: "Banks, investment banks, or any financial institution licenced under the Financial Services Act 2013 [Act 758], Islamic Financial Services Act 2013 [Act 759], the Labuan Financial Services and Securities Act 2010 [Act 704] or the Labuan Islamic Financial Services and Securities Act 2010 [Act 705]."


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