Malaysia removes service tax from JMB and MC maintenance charges and sinking funds

What changed in detail

Service Tax Policy No. 3/2026, dated 24 June 2026, states that maintenance or repair services — including maintenance management services — for non-residential premises provided by a Joint Management Body (JMB) or Management Corporation (MC) are not a taxable service.

Following from that, maintenance charges and sinking fund contributions charged by a JMB or MC to property owners are not subject to service tax, for residential and non-residential buildings alike. Because the underlying Service Tax Regulations 2018 have not yet been amended, the treatment is delivered as an exemption under section 34(3)(a) and section 34(4) of the Service Tax Act 2018: owners are exempted from paying and the JMB or MC is exempted from charging and collecting.

The exemption runs from 1 July 2026 until the amendment to the Service Tax Regulations 2018 is gazetted. It is not retrospective — no exemption is granted for periods before 1 July 2026, and any service tax on such charges payable up to 30 June 2026 must still be remitted. Where a JMB or MC buys taxable services from a third party and pays for them out of maintenance or sinking fund monies, it still pays service tax on those services.

What it means

The cut-off is the sharp edge. Amounts for periods to 30 June 2026 remain due and RMCD says explicitly that it may pursue them, so a JMB that stopped charging early has an exposure rather than a saving.

Note also that this is an exemption granted pending gazettement, not a change to the taxable service list. It is temporary by construction, and the eventual regulations are what will make it permanent — worth a diary entry rather than a permanent tax-engine rule with no review date.