Tenancy Agreement SST: What You Need to Know

As a tenant, it is crucial to understand your rights and obligations when entering into a tenancy agreement. Similarly, as a landlord, you need to ensure that the tenancy agreement you provide to your tenants is compliant with the latest regulations, including Service and Sales Tax (SST).

SST is a Malaysian tax implemented on 1 September 2018, under the Sales Tax Act 2018 and the Service Tax Act 2018. This tax replaced the previous Goods and Service Tax (GST) system and applies to a wide range of goods and services, including tenancy agreements.

Therefore, if you are a landlord or a tenant, here are some key things that you need to know about Tenancy Agreement SST:

1. What is SST?

SST is a tax imposed on the provision of services and the sale of goods. It applies to businesses that have an annual turnover exceeding RM500,000. This tax is charged by registered businesses and is collected by the Royal Malaysian Customs Department.

2. How does SST affect Tenancy Agreements?

Tenancy agreements are considered as taxable services under the new SST regime. As a result, landlords are required to register for SST if they have an annual rental income exceeding RM500,000. Once registered, they are required to charge 6% SST on the rent amount and submit it to the Customs Department.

3. Who is liable to pay SST?

As a tenant, you are not liable to pay SST on the rental amount. It is the landlord`s responsibility to charge and pay the SST to the Customs Department. However, if your landlord is not registered for SST, you may be asked to pay the tax on their behalf.

4. What should be included in a Tenancy Agreement SST?

A valid tenancy agreement SST should include the tenant`s and landlord`s full names and contact details, the rental amount, the lease period, terms of the tenancy, and the 6% SST charge. It is crucial to ensure that the tenancy agreement complies with the SST regulations to avoid any legal issues.

5. What happens if a landlord fails to register for SST?

If a landlord fails to register for SST, they may face legal consequences, including fines and penalties. They may be liable to pay the outstanding SST amount as well as interest on overdue payments.

In conclusion, as a landlord or tenant, it is crucial to be aware of the latest regulations and requirements concerning tenancy agreements SST. Ensuring compliance with all legal requirements can help landlords and tenants avoid any legal issues and maintain a positive rental relationship.