If you run a paid parking facility in Malaysia, here is something you need to know. Jabatan Kastam Diraja Malaysia released an updated guideline on parking services on 4 June 2026, replacing the previous version from February 2024.

Under the Service Tax Act 2018, any person, local authority, or statutory body that operates or provides paid parking for motor vehicles is carrying out a taxable service. This includes all payment methods, whether through Touch N' Go, auto-pay machines, metered parking, coupons, or mobile apps. Valet services are also covered.

The registration threshold is RM500,000 in taxable service value within a 12-month period. Once you cross that threshold, you are required to register under the Act and charge service tax at 6% on your parking services.

One thing to note for businesses operating across multiple service categories: the registration threshold looks at the total taxable service value. A restaurant earning RM1.1 million from food and beverages but only RM400,000 from parking may still need to register, depending on which service groups apply.

Accountants handling parking operators should also watch for two common classification errors. First, if a third party is appointed to manage and operate a parking facility on behalf of a local authority, that management service is taxed at 8%, not 6%. The parking fee charged to the end customer remains at 6%. Mixing these up will affect SST filing accuracy. Second, if a separate company is appointed solely to manage the payment system for a parking facility, that service is classified under information technology services, not parking services. It carries a different tax classification entirely and must be filed accordingly.

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