Malaysia treats joint lessors as separate persons for the service tax threshold

What changed in detail

Service Tax Policy No. 4/2026, dated 22 July 2026, sets out how the registration threshold and the charge apply where rental or leasing services in Group K of the First Schedule to the Service Tax Regulations 2018 are provided by more than one service provider.

Persons who jointly provide rental or leasing services under a single agreement are treated as separate entities. Each must register for service tax individually on its own total taxable services, and each must issue an invoice for its own portion or breakdown of the rental value.

The policy also settles the fall-back. Where the service is provided as a whole under a single agreement through a single invoice with no breakdown, issued in the name of one party — a joint venture or a representative, for example — that party is treated as the service provider and is liable for registration where the threshold value is met.

The policy applies with effect from 1 July 2025, the date rental and leasing became a taxable service under Group K.

What it means

This is a quiet trap for co-owned property. The default paperwork for a jointly owned building is one tenancy agreement and one invoice in one name, and that arrangement now concentrates the entire registration and collection obligation on the named party — potentially pushing one co-owner over the threshold on income that is mostly not theirs.

The fix is invoicing, not restructuring: issue per-owner invoices showing each share, and each owner tests the threshold on its own. Because the policy reaches back to 1 July 2025, the question is not only how to invoice from now on but whether anyone should already have been registered.