Import duties
1. Scope and rates
Import duties are levied on dutiable goods imported into the country, generally on an ad valorem basis but may also be imposed on a specific basis. The ad valorem rates range from 0% to 60%. Raw materials, machinery, essential foodstuffs and pharmaceutical products are generally non-dutiable or subject to duties at lower rates.
2. Tariff rate quota (TRQ)
Malaysia applies TRQ on selected agricultural products, such as chicken, milk and cream, hen eggs, cabbages. Under TRQ, the tariff charged depends on the volume of imports (“the quota”) which is determined by the relevant government agencies. Lower tariff applies to within quota imports and higher tariff for imports exceeding the quota.
3. Value of goods
The value of goods for the purpose of computing import duties is determined largely in accordance with the World Trade Organisation principles of customs valuation.
4. Exemptions
There is a range of duty exemptions on specific goods that prescribed persons are eligible to claim, subject to prescribed conditions under an Order made by the Minister. In addition, manufacturers are eligible to apply for merit-based duty exemptions on:
dutiable raw materials and components used directly for the manufacture of goods for export and domestic markets.
dutiable machinery and equipment which are used directly in manufacturing.
exemptions are also given to qualified manufacturers on the importation and local purchase of manufacturing aids subject to the type of industry and the specified category of goods.
Other promoted industries given exemption include:
- machinery, equipment and specialized tools endorsed by Malaysia Investment Development Authority (MIDA) which are to be used for aerospace maintenance, repair and overhaul (MRO) activities.
- spare parts, components, materials and specialized consumables goods endorsed by MIDA which are to be used for MRO activities.
- qualified hotel operators can apply for exemptions on specific machinery, equipment, and materials used directly in their hotel business
- registered haulage operators on essential operational assets like new prime movers and container trailers are also given exemption.
Manufacturers are required to apply to the relevant authorities for exemption. For example, MIDA and Royal Malaysian Customs Department.
Import duty exemption is available for Nicotine Replacement Therapy products until 31 December 2027.
Import duty, excise duty, and sales tax exemptions are granted for completely knocked down (CKD) locally assembled electric vehicles until 31 December 2027.
Exemptions for carbon capture and storage - refer to “Tax Incentives” chapter.
5. Prohibition of imports
Import restrictions are imposed on a range of products for protection of local industries or for reasons of security and public safety. An import licence has to be obtained for the importation of prohibited goods, unless otherwise exempted. Examples of goods requiring an import licence / permit from relevant authorities into Malaysia include:
Certain food products (such as rice), medical devices, cooking appliances, pharmaceuticals and cosmetics
Certain electrically operated machinery
Motor vehicles for the transport of persons, goods or materials
Used televisions including video or visual display with TV tuner, used air conditioners, used personal computers and used mobile phones
Billets of iron or steel
Alloy steel and high carbon steel
Stranded wire, cables, cordage, ropes, plaited bands and the like of aluminium wire
Natural or synthetic rubber insulated, or plastics insulated electric wire, cable, bars and strip and the like, whether fitted with connectors
Heavy machineries
Petroleum
Rags, plastics, papers or filters contaminated with scheduled wastes
Chlorofluorocarbons (CFCs) and Hydrofluorocarbons (HFCs)
Telecommunications equipment
Tobacco products, alcoholic beverages
Radioactive / nuclear materials / prescribed substances
Arms and ammunition
Motor vehicles parts
- Waste and scrap of paper, paperboard and metal
Note: absolute prohibition bans on electronic waste (e-waste) imports, effective 1 April 2026.
6. Prohibition of exports
Export restrictions are seldom imposed except on a limited range of products for reasons of security and public safety. An export licence has to be obtained for the exportation of prohibited goods.
Categories of goods requiring an export licence include, but are not limited to:
Cement clinker
Portland cement
Slags, dross, scaling and similar waste of iron and steel, zinc, nickel, copper, lead, aluminium
Slag and hardhead of tin
Zinc dust and sludge form
Used televisions including video or visual display with TV tuner, used air conditioners, used personal computers and used mobile phones
Hydrofluorocarbons (HFCs)
Face masks
Rice
Import and export licence applications may be submitted electronically via DagangNet (e-Permit) or manually to the relevant licence / permit processing authority.
Export duties
Export duties are generally imposed on the country’s main commodities such as crude petroleum and palm oil for revenue purposes.
The export duty rates range from 0% when the Crude Palm Oil (CPO) market price per metric ton falls below RM2,250 to 10% when the CPO market price is RM4,051 and higher.
Export Licensing
In addition, goods and technology that are controlled under the Strategic Trade Act 2010 is subject to additional export restrictions, and an export permit will be required. The controlled items are listed under several categories including military items and dual-use items such as electronics and computers.
Excise duties
1. Scope and rate
Excise duties are imposed on a selected range of goods manufactured in Malaysia or imported into Malaysia. These include beer / stout, cider and perry, rice wine, mead, indentured ethyl alcohol, brandy, whisky, rum and tafia, gin, cigarettes containing tobacco, electronic cigarette and electronic vaporising device, motor vehicles, motorcycles, playing cards, mah-jong tiles, certain sugar-sweetened beverages and pre-mixed preparations.
The rates of excise duties vary from a composite rate ranging from RM1.21 per litre and 16.5% for native / rice wine (e.g. Samsu and local rice wines), RM0.42 per stick for cigarettes, RM440 per kilogram for cigars, cheroots, and cigarillos, RM798 per kilogram of tobacco content for heated tobacco products, RM0.90 per litre for certain sugar-sweetened beverages and up to 105% for motorcars (depending on engine capacity).
Certain pre-mixed preparations of chocolate or cocoa-based, malt, coffee and tea such as 2-in-1 or 3-in-1 pre-mixed beverages are subject to an excise duty of RM0.47 per 100 grams.
Liquid or gel (containing nicotine or nicotine-free) used in electronic cigarettes and vape are subject to an excise duty of RM0.40 per millilitre.
2. Specific exemption for individually owned taxis and hired cars
Full sales tax and excise duty exemption is available on the sale / transfer / private use / disposal of budget taxis, executive taxis, Teksi 1 Malaysia, airport taxis (budget and family), and hired cars, which have been held for at least five years from the registration date.
3. Excise licensing
Unless exempted from licensing, a manufacturer of tobacco, intoxicating liquor, sugar-sweetened beverages or goods subject to excise duties must have a licence to manufacture such goods.
The licence to manufacture also permits the holder to store such goods, otherwise a warehouse licence is required for storage of goods subject to excise duty.
4. Payment of duty
As a general rule, duty is payable at the time the goods leave the place of manufacture. However, excise duty on a predefined list of motor vehicles for the transport of persons is not payable until the vehicles are removed from the place of manufacture for registration with the Road Transport Department, provided that a security is given (up to a maximum of four years from the date of removal from the place of manufacture).
5. Exports
No excise duty is payable on dutiable goods that are exported.
Licensed Manufacturing Warehouse (LMW)
Manufacturers who export 80% or more of their finished products can apply for LMW status. Raw materials, components and machinery used in the manufacturing process are generally exempted from import duties and sales tax.
Free Zone
A free zone is deemed to be a place outside a principal customs area. Subject to certain exclusions, goods can be brought into, produced or provided in a free zone without payment of customs duty or excise duty. A free zone is any area in Malaysia which has been declared by the Minister to be a Free Zone. There are two types of Free Zones in Malaysia: (a) Free Industrial Zone (FIZ) and (b) Free Commercial Zone (FCZ). Manufacturing activities are allowed to be conducted in FIZ while trading activities are allowed to be conducted in FCZ.
Authorised Economic Operator (AEO)
Currently, the AEO status is given to eligible manufacturers, operators (including warehouse operators), traders and logistics service providers. An AEO is a person who is involved in import and export activities and, having been “certified” to be compliant in its customs related operations, is entitled to enjoy benefits provided in the AEO program.
Free Trade Agreements
Malaysia has concluded several regional and bilateral free trade agreements and several more are still under negotiation. One of the key features of free trade agreements is the preferential tariff treatment accorded to member countries. Currently, the following free trade agreements are in force:
ASEAN Trade in Goods Agreement
ASEAN-China Free Trade Agreement
ASEAN-Hong Kong, China Free Trade Agreement
ASEAN-Korea Free Trade Agreement
ASEAN-Australia-New Zealand Free Trade Agreement
ASEAN-Japan Comprehensive Economic Partnership Agreement
ASEAN-India Trade in Goods Agreement
Preferential Trade Agreement Amongst D-8 Member States
Malaysia-Pakistan Closer Economic Partnership Agreement
Malaysia-Japan Economic Partnership Agreement
Malaysia-Chile Free Trade Agreement
Malaysia-India Comprehensive Economic Cooperation Agreement
Malaysia-New Zealand Free Trade Agreement
Malaysia-Australia Free Trade Agreement
Malaysia-Turkey Free Trade Agreement
Regional Comprehensive Economic Partnership
Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Framework Agreement on Trade Preferential System among the Member States of the Organisation of the Islamic Conference (TPS-OIC)
- Malaysia–United Arab Emirates Comprehensive Economic Partnership Agreement (effective 1 September 2025)
- EFTA–Malaysia Economic Partnership Agreement (MEEPA)(Iceland, Liechtenstein, Norway, and Switzerland).
The preferential tariff treatment and the rules of origin may vary from one free trade agreement to another.
Windfall Profit Levy
Windfall Profit Levy is levied on CPO producers. A 3% levy rate is imposed when the market price of the CPO exceeds the threshold value of RM3,150 per metric ton for Peninsular Malaysia and RM3,650 per metric ton for Sabah and Sarawak.
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