FlipStay blog · 14 October 2026 · updated 22 October 2026

Malaysia SST and Tourism Tax: How to Bill Guests Correctly

Learn how to bill Malaysia's 8% Service Tax and RM10 Tourism Tax for local and foreign guests. Avoid RMCD audit penalties and front-desk billing disputes.

Operating a small hotel, guesthouse, or homestay in Malaysia requires navigating two distinct hospitality taxes that treat domestic and international travellers differently. Getting these calculations wrong leads to guest disputes at checkout, messy folios, and penalties during Royal Malaysian Customs Department (RMCD) audits.

To keep your billing compliant, your front desk must separate the Service Tax (SST) from the federal Tourism Tax (TTx). Here is how the rules work, how to handle exemptions, and how to structure your guest invoices.

Understanding the 8% Service Tax (SST)

Service Tax is governed by the Service Tax Act 2018. In Malaysia, accommodation operators must charge Service Tax on room nights and related services once their annual taxable turnover exceeds the RM500,000 threshold within a 12-month period.

Key rules for Service Tax in accommodation include:

• The tax rate: The standard rate for taxable accommodation services is 8% (revised from 6% on 1 March 2024). Always check with your accountant to confirm how recent statutory updates apply to your specific licence category.
• What is taxable: The 8% applies to the room rate (including room-and-breakfast packages), extra bed charges, early check-in or late check-out fees, no-show charges you have collected, and other services you provide on the premises, such as in-house laundry or meeting-room packages. Food and drinks sold by the hotel are taxed at 6%, not 8%. Cancellation fees and forfeited deposits are treated as compensation and are not subject to service tax.
• Guest status does not matter for SST: Unlike the Tourism Tax, Service Tax applies equally to everyone. Both Malaysian citizens and foreign tourists must pay SST on their taxable charges if your business is registered for Service Tax.
• Registration threshold: If your property generates less than RM500,000 in gross annual revenue from taxable services, you do not register for SST and must not charge it to guests. Collecting tax without a valid SST registration number is illegal.

The Tourism Tax (TTx) rules and MyKad exemptions

The Tourism Tax Act 2017 created a separate federal levy managed by the RMCD. Its application depends entirely on the nationality and residency status of the guest staying in the room.

• The flat rate: The rate is fixed at RM10 per room per night. It does not scale with room price. A RM80 budget room and a RM500 suite both incur the exact same RM10 nightly charge.
• The foreign guest liability: Any tourist who does not hold Malaysian citizenship or permanent residency must pay the RM10 charge for every night stayed.
• The domestic exemption: Malaysian citizens holding a valid MyKad and permanent residents holding a valid MyPR are entirely exempt from the Tourism Tax.
• Verification duty: The exemption is not automatic based on a guest's verbal statement. Front desk staff must inspect and record the MyKad or MyPR number during check-in. If a local guest cannot present proof of citizenship or permanent residency, the hotel is required by law to collect the RM10 per room per night.
• Registration: Operators of accommodation premises must register with RMCD for Tourism Tax regardless of turnover. Exempt categories include homestays and kampungstays registered with MOTAC and, under RMCD's guide, premises with four rooms or fewer; check the current list with RMCD.

Worked example: Domestic vs foreign guest billing

A common mistake is calculating Service Tax on top of the Tourism Tax. The Tourism Tax is an independent statutory charge; it is never subject to SST.

Consider a scenario where a guest books a standard room for 3 nights at RM200 per night. Assume the property is registered for both SST and TTx.

Guest A: Malaysian citizen (holding MyKad)

• Room charge: RM200 × 3 nights = RM600.00
• Service Tax (8% on RM600): RM48.00
• Tourism Tax: RM0.00 (Exempt under MyKad)
• Total invoice amount: RM648.00

Guest B: Foreign tourist (holding a foreign passport)

• Room charge: RM200 × 3 nights = RM600.00
• Service Tax (8% on RM600): RM48.00
• Tourism Tax: RM10 × 3 nights = RM30.00
• Total invoice amount: RM678.00

Notice that the 8% SST applies only to the RM600 room fee. You must never charge 8% on the RM30 Tourism Tax. The folio must display the RM10 nightly rate as a distinct line item so the guest can see why their total differs from the advertised room rate.

Local council fees (Penang, Melaka, Langkawi)

In addition to federal SST and TTx, several states and local councils impose regional hospitality fees. If your property is located in one of these jurisdictions, your billing workflow must accommodate a third layer:

• Penang hotel fee: Charged per room per night: RM2 for 3-star properties and below, RM3 for 4- and 5-star hotels.
• Melaka Heritage Charge: Charged per room per night, RM3 to RM5 depending on the hotel's rating (raised from a flat RM2 on 1 January 2025).
• Langkawi Tourism Promotion Fee: Charged per room per night, tiered according to the star rating of the accommodation.

These local council levies are separate from federal taxes. Like the federal Tourism Tax, they must be displayed as discrete line items on the checkout folio. Check the specific local council by-laws in your district to ensure you collect and remit the correct amounts.

Front desk workflows and record-keeping

To prevent discrepancies at the end of the month, train your front-desk staff to follow a standardised sequence:

1. Capture identification on arrival: Record the guest's passport number or MyKad number into your guest ledger. Keep this record accessible for audit purposes.
2. Set up tax rules in your property management system: Manual tax calculations during busy shifts invite math errors. Using a dedicated system like FlipStay, you set the SST and tourism tax lines once in the tax settings (remove the preset's 10% service charge if you don't charge one), and staff tick "Foreign visitor" at check-in so the RM10 tourism tax is added only for foreign guests. (It produces PDF invoices but is not connected to Malaysia's MyInvois e-invoicing system.)
3. Handle OTA bookings carefully: If the guest paid through a booking platform registered with RMCD as a digital platform service provider (DPSP), the platform charges the RM10 Tourism Tax itself. If the guest pays you (for example, a pay-at-hotel booking), you collect it. Check each booking's payment details so you neither miss the charge nor collect it twice, and follow RMCD's current public ruling on DPSP bookings.
4. Remit on schedule: Service tax returns (Form SST-02) are filed every two months through MySST. Tourism Tax returns (Form TTx-03) are filed through the separate MyTTx portal, usually every three months, by the last day of the month after the period ends. Reconcile your front-desk revenue reports against these figures before filing.

What to do this week

1. Audit your check-in register: Ensure your reception team is actively recording MyKad or MyPR numbers for all domestic guests claiming exemption, rather than simply checking a box.
2. Review your folio templates: Verify that your guest invoices itemise the room rate, the 8% SST, the RM10 Tourism Tax, and any local council levies on separate lines, with no SST calculated on the Tourism Tax.
3. Automate your desk calculations: Set up your tax rules in your front-desk software so your staff does not calculate rates by hand. You can set up a free account on FlipStay to issue itemised receipts configured for Malaysian billing.

Frequently asked questions

Does a permanent resident holding a MyPR card have to pay the Tourism Tax?

No. Holders of the red Malaysian identity card (MyPR) are exempt from the RM10 Tourism Tax, just like MyKad holders. Front desk staff must record the MyPR number in the guest profile as proof of exemption.

Can I charge Service Tax on the Tourism Tax?

No. Service Tax applies only to taxable accommodation and services provided by the operator. The Tourism Tax is an independent federal duty collected on behalf of the RMCD and must not be taxed again with SST.

What happens if a foreign guest refuses to pay the Tourism Tax?

Under the Tourism Tax Act 2017, the operator has a legal obligation to collect the tax. If a foreign guest refuses to pay, inform them that the fee is a statutory requirement imposed by the Malaysian federal government, documented on an official tax receipt. If they still refuse, check with RMCD or your tax agent how to proceed, for example whether to decline the booking or report the incident.

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