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Understanding Malaysian Customs
Import duty is mostly imposed ad valorem, with specific duties on some items. Tariff varies considerably depending on classification. However, a number of raw materials, components and machinery are not dutiable. Average duties for most goods are below 10%, except transportation, metal, rubber and textile products.
Excise duties are levied on liquor, tobacco, motor vehicles and playing cards (including mahjong tiles), payable by the importer or the manufacturer as the case may be.
Malaysia's trade landscape is altering rapidly. The growing number of free trade agreements present businesses with new opportunities as well as new challenges. RTAs in force include ASEAN free trade agreements (AFTA), ASEAN-China, ASEAN-Korea, and the reciprocal AISP (ASEAN Integrated System of Preference) offered to Cambodia, Laos, Myanmar and Vietnam. Malaysia has also intensified bilateral FTA negotiations in recent years:-
- Malaysia-Pakistan (Early Harvest Programme has been extended to 31 December 2007)
- Malaysia-Japan (MJEPA, with tariff concessions commencing from July 2006)
- Malaysia-Chile
- Malaysia-Korea
- Malaysia-India
- Malaysia-United States Free Trade Area
- Malaysia-Australia
- Malaysia-New Zealand
- Malaysia-United States Trade and Investment Framework Agreement (TIFA)
- Trade Preferential Tariff Scheme (TPS) for Organization Of Islamic Conference (TPS-OIC)
Proactive steps in the areas of classification (including ASEAN Harmonized Tariff Nomenclature, AHTN) and relevant origins rules, in conjunction with effective supply chain planning would be the key to success in this changing landscape, amongst others.
Valuation of goods is largely determined in accordance with the World Trade Organization principles. Enforcements in custom valuation compliance are on an increasing trend since the enactment of the relevant legislation in 2000.
A range of policies are in place to promote industrialization / trade. For example, manufacturers who export 80% or more of their finished goods can apply for licensed manufacturing warehouse (LMW) status. Under the LMW facility, qualifying raw materials, components and machinery used in the manufacturing process are exempt from import duties.
Import restrictions are seldom imposed except for reasons of security or for protection of local industries. Import licence is required for certain prohibited goods due to public safety or standards conformance reasons.
The Royal Department of Customs Malaysia is responsible for the enforcement of customs and related laws, including the recently introduced Customs Rulings. Customs Appeal Tribunal has also been set up in 2007. Other Ministries and agencies involved in trade related policies include Ministry of Finance (MoF), Ministry of International Trade and Industry (MITI), and Malaysian Industrial Development Board (MIDA).
Services Offered
Our professional services are well customised to your company's needs. We focus on providing the best solutions to your company to achieve customs efficiency and strategic customs planning opportunities. We specialise in the following areas:
- Customs valuation - advise, ruling application, dispute resolution, duty saving opportunities
- Tariff classification (including AHTN) - advise, planning, ruling application
- Duty exemption - opportunities identification, application
- FTAs / preferential tariffs - monitoring, planning, certificate of origin
- Duties drawback and refunds
- Warehousing, duties deferment/suspension facilities - advise, application
- Tariff reduction lobbying
- Customs compliance reviews / "Health Checks"
- Post importation audit management and support
- Trade compliance control - policy formulation, process implementation
- Technical training
- Import and export licensing - advise, application
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