Low Value Goods (LVG) Tax
New Tax : From April 2023, Malaysians to pay extra 10% for online overseas shopping below RM500
Starting from April, Putrajaya will be collecting a new sales tax, which will see Malaysian shoppers paying 10 per cent more every time they buy goods imported from overseas (that are priced less than RM500).
The Royal Malaysian Customs Department (RMCD) has confirmed that the Malaysian government will begin implementing a 10% sales tax on imported low-value goods (LVG) that are purchased online, set to take effect from 1 April 2023 onwards.
Goods imported from overseas that are priced under RM500 will be subject to the tax.
What is this tax?
The Malaysian government will be imposing a sales tax of 10 per cent on “low-value goods” (LVG) (goods that are priced less than RM500) which are sold online and delivered from overseas to customers in Malaysia (including in duty-free islands Labuan, Langkawi, Tioman and Pangkor and special areas like free zones) by air, sea or land.
How much more will it cost?
The new sales tax of 10 per cent is only for overseas low-valued goods (priced less than RM500) bought online from April 1, 2023 onwards. This tax will not be imposed on the delivery charges or insurance costs for the bringing in of the item from overseas to Malaysia.
Here’s an example: Let’s say you are buying an item from overseas with the price of RM490 from an online shopping platform, and there is a delivery charge of RM10. The total will be RM500, if you bought it before April 2023. From April onwards you will have to pay RM490 plus RM49 (10 per cent sales tax on the item) and the RM10 delivery fee. The total payable upon purchase will now be RM549.
The sales tax on the LVG will be charged at the time when the online shopping platform issues the order confirmation.