TaxSavvyMY

Rental group relief

We rent property to our sister company. Is service tax due?

The situation

Rental between companies in the same group can be relieved if external rental does not exceed 5% of total rental value in the test period.

The law

  • Service tax scope expansion from 1 July 2025 (rental, construction, financial, healthcare, education): New taxable services with own thresholds: rental RM1 million, construction RM1.5 million, education nil

What it means for you

Check the group definition and keep records of external tenants. If external rental passes 5%, registration may be required. The wording of the test differs in commentary, so confirm the RMCD policy text.

What to do

  1. List group and external tenants.
  2. Compute the external share.
  3. Document the test.
  4. Register if the test fails.

We can do this for youService tax registration and SST-02 returns: MYR 800

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