Service Tax Treatment on Maintenance Services Related to Residential Houses

The Royal Malaysian Customs Department (Kastam) issued Service Tax Policy No. 5/2024 on 1 April 2024 to provide clearification on service tax treatment on maintenance services related to residential houses which has implemented from 1 March 2024 onwards.

Under section 8 of the Service Tax Act 2018, the maintenance or repair services are subject to service tax excluding:

1. Maintenance management services relating to land or buildings for residential use provided by any developer, joint management body, management corporation or residential association; or
2. Repair services for residential buildings.

The Minister of Finance has set the service tax treatment policy for maintenance services (including repair) for residential houses as follows:

1. Maintenance services (including repairs) of goods/equipment (moveable items) in residential houses are subject to service tax.
2. Maintenance services (including repairs) of goods/equipment fixed to the structure of the building provided directly to the owner or occupant of the residential house are not subject to service tax.
3. Sinking fund related to residential houses imposed by the developer, joint management body or management corporation is not subject to service tax.

For service tax treatment for warranty is as follows:

1. The warranty given for free during the purchase of the product is not subject to service tax; and
2. Warranty extension with additional fee is subject to service tax.

Please do not hesitate to contact us for more information:

Ten Jia Sheng
014-911 1880
[email protected]