Do You Know How Much Tax You’ll Pay to Import a Car to Malaysia?

If you’re considering importing a car into Malaysia, understanding the tax implications is crucial. Malaysia’s tax system for imported cars is designed to protect local automotive manufacturers while also generating revenue for the country. Here’s a breakdown of what you need to know about the taxes involved in bringing a foreign car into Malaysia.

Understanding Malaysia’s Import Tax Structure

When importing a car to Malaysia, you’ll encounter several types of taxes and duties. The overall cost can significantly increase the vehicle’s original price, so it’s essential to factor these into your budget. Here are the main components:

Import Duty

Import duty is the first tax applied to a vehicle entering Malaysia. The rate depends on the car’s country of origin, with ASEAN-manufactured cars often enjoying lower rates due to regional trade agreements. Non-ASEAN cars can face higher rates, varying widely based on the vehicle’s type and specifications.

Excise Duty

The excise duty is where the bulk of the cost lies. This tax is imposed on both imported and locally manufactured cars and is calculated based on the engine capacity and the car’s price. Rates can range from 60% to over 100%, making it the most significant factor in the total tax amount.

Sales Tax

On top of import and excise duties, a 10% sales tax is applied. This tax is calculated on the sum of the car’s cost, import duty, and excise duty, further increasing the total payable amount.

Additional Costs

Remember to account for other costs such as shipping, insurance, and registration fees. If you’re importing a used car, ensure it meets Malaysia’s import criteria, which include age restrictions and technical requirements.

Here’s a structured presentation of the import duty and local duty (excise duties and sales tax) applicable for importing different types of vehicles into Malaysia, differentiated by engine capacity and vehicle type:

A) PASSENGER CARS (Including Station Wagons, Sports Cars, and Racing Cars)

Engine Capacity (cc)	Import Duty (MFN)	Import Duty (ATIGA)	Excise Duties	Sales Tax
< 1,800	30%	0%	75%	10%
1,800 – 1,999	30%	0%	80%	10%
2,000 – 2,499	30%	0%	90%	10%
Above 2,500	30%	0%	105%	10%

B) OTHER MOTOR CARS

Engine Capacity (cc)	Import Duty (MFN)	Import Duty (ATIGA)	Excise Duties	Sales Tax
< 1,500	30%	0%	60%	10%
1,500 – 1,799	30%	0%	65%	10%
1,800 – 1,999	30%	0%	75%	10%
2,000 – 2,499	30%	0%	90%	10%
Above 2,500	30%	0%	105%	10%

C) COMMERCIAL VEHICLES

Class	Import Duty (MFN)	Import Duty (ATIGA)	Excise Duties	Sales Tax
All	30%	0%	NIL	10%

Notes:

• MFN (Most Favoured Nation rate): This rate applies to imports from WTO member countries that do not have a specific trade agreement with Malaysia.
• ATIGA (ASEAN Trade in Goods Agreement): This preferential rate applies to imports from ASEAN countries, aiming to reduce or eliminate tariffs to encourage trade within the region.