Lifestyle

The 10% on Your Overseas Online Order: How Malaysia's Low Value Goods Tax Works, and Why RM500 Is Not About Postage

Since 1 January 2024 anything you buy online from overseas priced at RM500 or less carries a flat 10% sales tax, charged by the seller at checkout rather than by Customs at the border. The threshold is drawn on the price of the goods alone: Customs states plainly that transportation, insurance and other charges are excluded, so a RM480 item with RM40 shipping is still low value goods. Only sellers whose Malaysian low value goods sales exceed RM500,000 in 12 months have to register, which is why some checkouts show the tax and others do not. Cigarettes, tobacco, liquor, smoking pipes, e-cigarettes and vape liquids are outside the regime entirely.

Marcus Wong21 September 202610 min read

> Quick take: the 10% line on your Shein, Taobao or AliExpress checkout is sales tax on low value goods, and it has been charged since 1 January 2024. The RM500 threshold is measured on the price of the goods only, with shipping and insurance stripped out. If a checkout does not show the tax, the seller is probably below the RM500,000 registration threshold, and the parcel may be assessed at the border instead.

Malaysians buy a lot of small things from abroad, and for years those parcels arrived with nothing added. That ended when the Sales Tax (Amendment) Act 2022 brought low value goods into the sales tax net. The Ministry of Finance put the mechanics plainly: the charging and levying of sales tax on low value goods took effect on 1 January 2024, at a flat rate of 10%, on goods valued at RM500 or less imported into Malaysia by land, sea or air. Royal Malaysian Customs runs the scheme through its own portal at MyLVG, where its own page notes the underlying legislation came into operation on 1 January 2023, a year before collection started.

The number almost everyone measures wrongly

The most common mistake is to add up the total you paid and compare that to RM500. That is not the test.

Customs answers this directly in the MyLVG FAQ: the sales tax is charged on the sale value of the goods "not including any tax, duty, fee or other charges such as transportation, insurance or other costs". So a jacket priced at RM480 with RM40 of shipping is low value goods. You pay 10% on the RM480, which is RM48, and the RM40 of postage is irrelevant to whether you crossed the line.

The mirror image also holds. A RM520 item is not low value goods even if the seller ships it free. It falls outside the regime, and goes through the ordinary import duty and sales tax process at the border instead.

Why some checkouts charge it and some do not

The tax is collected by a registered seller at the point of sale, not by Customs when your parcel lands. Registration is not voluntary above a certain size: local and foreign online sellers whose total low value goods sales brought into Malaysia exceed RM500,000 in any 12 months must register through mylvg.customs.gov.my and are issued a low value goods registration number.

That threshold is the reason your experience differs from shop to shop. The large marketplaces are registered and will show the tax on the order summary. A small overseas boutique may never come close to RM500,000 of Malaysian sales and will not be registered, so its checkout shows nothing.

This is not a loophole in your favour. Customs states that goods declared at import without any low value goods registration number will be charged sales tax on imports instead. The charge moves to the border, where a courier may also add its own clearance or disbursement handling on top.

If you want to check before you buy, the MyLVG portal lets the public look up registration status alongside the legislation and guides.

The double-taxation guard, in Customs' own worked examples

The part that reassures people most is buried in the FAQ as two examples.

In the first, a shopper named Asma buys RM300 of low value goods from a registered seller, sent by air courier. She pays RM30 of low value goods tax at checkout. On arrival, Customs states, no additional duties or taxes are charged, because the consignment is entitled to de minimis. The de minimis facility exempts import duty and sales tax on imports for consignments with a CIF value under RM500 arriving by air courier or post.

In the second, Zaris buys two kitchenware sets at RM300 each plus a RM50 box, a CIF total of RM650. That is above de minimis, so the shipment is assessed at import. But because the low value goods sales tax was already collected at the point of sale, only import duties are charged on arrival, and no further sales tax on imports is added.

The principle across both: you pay the 10% once, at the point where it is due. What survives above the de minimis line is import duty, which is a separate charge with its own rates depending on what the item is.

What is left out

The exclusions are narrow and predictable. The Ministry of Finance lists cigarettes, tobacco products, intoxicating liquors and smoking pipes, on the grounds that all of them already attract import duty, excise duty and sales tax through normal channels. The MyLVG FAQ adds electronic cigarettes and vaping liquids or gels to that list.

Anything else you buy online from overseas at RM500 or less is in scope.

What this means for the way you shop

Three practical consequences follow.

First, splitting an order to stay under RM500 does not avoid the 10%, because the threshold defines what low value goods are rather than granting an exemption. Staying under the line keeps you inside the low value goods regime, which is where the flat 10% lives. Going above it takes you into import duty territory, which can be more expensive or less, depending on the tariff code.

Second, the price you compare between a local seller and an overseas one should include the tax. A RM300 gadget from abroad is RM330 once the low value goods tax is added, and that is often closer to the local price than it first looked.

Third, keep the order summary. If a courier later asks you for sales tax on a consignment where the seller already charged it, the checkout receipt showing the low value goods tax line is the document that settles it.

Customs takes queries on this at 1-300-888-500 or mylvg@customs.gov.my, and the scheme is administered by the Internal Tax Division at its Putrajaya headquarters.

This is a plain explainer of published rules and not tax advice. For a specific consignment, the Customs guides on MyLVG are the authority.

What you pay on an overseas online order, by scenario

Your order	Charged at checkout	Charged at the border	Note
Goods RM500 or less, registered seller	10% low value goods sales tax	Nothing, if CIF is under RM500 by air courier or post	Customs' own example: RM300 goods, RM30 tax, nothing more
Goods RM500 or less, unregistered seller	Nothing	Sales tax on imports	Customs charges it where no registration number is declared
Goods RM500 or less, but CIF over RM500	10% low value goods sales tax	Import duty only	Customs' own example: RM650 CIF, duty charged, no extra sales tax
Goods above RM500	Not low value goods	Import duty and sales tax on imports	Ordinary import process applies
Cigarettes, liquor, vape liquids	Excluded from the regime	Import duty, excise duty and sales tax	Already taxed through normal channels

Frequently Asked Questions

Does the RM500 low value goods threshold include shipping and insurance?

No. Royal Malaysian Customs states in the MyLVG FAQ that sales tax is charged on the sale value of the goods not including any tax, duty, fee or other charges such as transportation, insurance or other costs. An item priced at RM480 with RM40 of shipping is therefore still low value goods, and the 10% is calculated on RM480, which is RM48. Note that the separate de minimis facility at the border does use CIF value, meaning cost, insurance and freight, which is why a parcel can be low value goods for the checkout tax and still exceed de minimis for import duty.

Why did my overseas order not charge the 10% tax?

Most likely because that seller is not registered. Only local and foreign online sellers whose total low value goods sales brought into Malaysia exceed RM500,000 in 12 months are required to register through mylvg.customs.gov.my and collect the tax at the point of sale. Small overseas shops often fall below that. This does not mean the goods are tax free: Customs states that goods declared at import without a low value goods registration number will be charged sales tax on imports instead, and a courier may add its own clearance handling. You can check a seller's registration status on the MyLVG portal.

Will I be charged twice, once at checkout and again by Customs?

The scheme is designed to stop that. Customs gives two worked examples in the MyLVG FAQ. In the first, RM300 of low value goods bought from a registered seller and sent by air courier attracts RM30 at checkout and nothing at import, because the consignment is entitled to de minimis. In the second, a consignment with a CIF value of RM650 exceeds de minimis, so import duty is charged on arrival, but because the low value goods sales tax was already collected at the point of sale, no further sales tax on imports is added. Keep the order summary showing the tax line in case a courier asks for it again.

Which goods are excluded from Malaysia's low value goods tax?

The Ministry of Finance excludes cigarettes, tobacco products, intoxicating liquors and smoking pipes, because these already attract import duty, excise duty and sales tax through the normal channels. The MyLVG FAQ adds electronic cigarettes and vaping liquids or gels to the excluded list. Everything else bought online from overseas at RM500 or less is within scope, whether it arrives by land, sea or air. Goods priced above RM500 are not low value goods at all and go through the ordinary import duty and sales tax process instead.

#Low Value Goods#Online Shopping#Customs#Sales Tax#Malaysia

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