2% Service Tax Exemption on Rental / Leasing Services (Effective 1 Jan 2026)

       Overview:

Effective 1 January 2026, rental or leasing services that are subject to 8% Service Tax will receive a 2% exemption.  This means:

• Only 6% Service Tax is payable
• The exempted 2% must be declared in Item 18(c)(3) of the SST-02 form
• SST-02 declaration must follow the latest Customs guideline 

 QNE has enhanced this in Version 2026.1.1.0 onward to support correct calculation and reporting.

Scenario:

How to prepare a Service Tax Exemption for a Rental Service RM1,000 and displayed in SST-02 Form?
 

Solution:

1. In Tax Code Maintenance, after upgrading new version there are already have the new tax codes  

• SVTD-RL (Service Tax for Rental/Lease Services with 2% Service Tax Exemption (Payment Basis)
• SVT-RL (Service Tax for Rental/Lease Services with 2% Service Tax Exemption)
   

By default, this tax code is 6%.      

2. When user create the Sales invoice and select the tax code “SVT-RL” system will automatically calculate the exempted of 2% and amount. Notice that service tax charged based on 6%

Remark: By default, these 2 columns are not displayed in the system automatically. User need to drag it manually. 

3. User can select existing format SR 04 

4. System stated the exempted amount in the bottom in this format

5. System declared exempted 2% of the taxable amount in Item 18(c)(3) of the SST-02 form