Not Sure About Your Company's SST Status?
SST penalties can add up quickly once late registration, filing, or payment issues stack up. Contact our team for a quick review before Customs does.
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Many new business owners only pay attention to SST once they receive a letter from the Royal Malaysian Customs Department (RMCD) — usually because of late registration, late filing, or late payment. The problem is, SST penalties aren’t small, and if left unresolved, things can get more complicated than expected. So, here’s a simple breakdown of the types of SST penalties and the most practical way to avoid them all.
The Most Common Types of SST Penalties
Basically, there are three main situations that can get your company hit with SST penalties.
1. Late SST Registration
If your business has crossed the RM500,000 threshold (or RM1.5 million for the F&B sector) but hasn’t registered for SST, RMCD can impose a compound of up to RM50,000 or imprisonment of up to 3 years, depending on the severity of the case. In practice, most compound cases range from a few hundred to a few thousand ringgit depending on how long the delay was.
2. Late Filing of SST-02 Returns
SST returns need to be filed every 2 months (for most categories), even if there were no taxable sales during that period. Filing late — even by a day — can trigger an automatic penalty.
3. Late Payment of Outstanding Tax
This is the most common issue. RMCD imposes late payment penalties on a progressive percentage basis: first 30 days late: 10%; 31–60 days late: an additional 15% (total 25%); 61–90 days late: a further 15% (total 40%). After 90 days, RMCD can take further enforcement action, including a full audit of your company.
Why Companies Often Overlook SST Penalties
Actually, most SST penalty cases aren’t because a business deliberately tried to avoid tax — it’s more of an operational problem: no up-to-date tracking system, accounts staff turnover without proper handover, or the owner themselves not noticing the deadline because they’re busy running daily operations.
The Easiest Way to Avoid SST Penalties
- Set automatic reminders for every SST-02 deadline — don’t rely on memory alone.
- Use an accounting system that tracks SST automatically, so the outstanding tax amount is always clear.
- Outsource to a firm that manages compliance — this is the most effective option for owners who don’t have time to focus on deadlines every month.
- Pay early even in small amounts — better to pay bit by bit than let it accumulate into a large penalty.
What to Do If You’ve Already Been Hit With SST Penalties
If your company has already received a notice from RMCD, don’t ignore it. In certain cases, RMCD has discretion to reduce penalties if you can show reasonable cause and act promptly to settle the outstanding amount. The longer it’s left unresolved, the harder it becomes to negotiate.
If you’re unsure of your company’s current SST status — whether there’s an outstanding balance, unpaid penalties, or a risk of late filing — don’t wait until you get a letter from Customs. Contact our team for a quick review.
Since SST filings tie closely into your regular bookkeeping, our accounting services can help you stay on top of these deadlines.
Frequently Asked Questions
How much is the compound for SST penalties on late registration?
RMCD can impose a compound of up to RM50,000 or imprisonment of up to 3 years, depending on the severity of the case — in practice, most compounds range from a few hundred to a few thousand ringgit depending on the length of the delay.
How often do I need to file SST-02 returns?
Every 2 months for most categories, even if there were no taxable sales during that period.
What are the SST penalties for late payment?
A progressive penalty: 10% for the first 30 days late, an additional 15% (total 25%) for 31–60 days, and a further 15% (total 40%) for 61–90 days late.
What can I do if I’ve already been hit with SST penalties?
Don’t ignore an RMCD notice — in certain cases RMCD has discretion to reduce penalties if you show reasonable cause and act promptly to settle the outstanding amount.
How do I avoid SST penalties going forward?
Set automatic reminders for SST-02 deadlines, use an accounting system that tracks SST automatically, or outsource compliance to a firm that can monitor deadlines for you.
Further reading:
Official reference: Royal Malaysian Customs Department (RMCD)
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