Starting 1 October, the Malaysian government will expand the Sales & Service Tax (SST) to cover financial services.
Here’s what you need to know:
1. What is happening on 1 October 2025?
The Ministry of Finance announced that the scope of Sales & Service Tax (SST) will be expanded. An 8% SST will now apply to financial services fees and commissions, unless specifically exempted.
2. How does this affect me as a Versa user?
If you invest through Versa, some services will now include SST:
- Management fees for unit trusts and Private Retirement Schemes (PRS) (refer to FAQ #4)
- Trustee fees for unit trusts and PRS (refer to FAQ #4)
- Private Pension Administrator (PPA) fees (refer to FAQ #5)
3. Do I need to deduct 8% from the returns shown in my Versa app?
No, you don’t need to make any deductions yourself. The returns displayed in the Versa app are nett returns — this means all fees and the 8% SST (where applicable) have already been factored in. What you see in the app is exactly what you earn.
4. Will I be directly charged SST?
No. SST on management and trustee fees is applied at the offering level, not billed to you directly. It is included in the fund’s operating costs, which may have a small impact on the Net Asset Value (NAV) of the offering.
5. What about Private Pension Administrator (PPA) fees on the Private Retirement Scheme Offerings?
Yes, PPA fees (charged by the Private Pension Administrator for PRS accounts) may include SST. These will appear together with the normal PPA fees.
6. Why is the government expanding SST?
This is part of the government’s effort to broaden the tax base and standardize the taxation structure. It applies to various services, not just the financial services industry.
7. Do I need to do anything?
No action is required on your part. Your Versa account and services will continue as usual.
8. Where can I learn more on SST for financial services?
For official information, you can visit the Royal Malaysian Customs Department (RMCD) website and read their Guide on Financial Services.