Malaysia to charge 6% tax on private education for international students from July 2025

Malaysia will charge a 6% service tax on private education services for international students starting July 1, 2025. The new tax applies to private preschools, schools, colleges, universities, and language centres serving non‑Malaysian students.

The tax is part of Malaysia’s revised Sales and Service Tax (SST) rules. Private institutions charging over RM60,000 per year in tuition must register for the tax. Higher education institutions and language centres must register regardless of turnover if they teach international students. Malaysian students will be exempt.

The Ministry of Finance announced the measure earlier this month, saying it aims to “strengthen the country’s fiscal position by increasing revenue and broadening the tax base without adding undue burden on the majority of Malaysians”.

Malaysia aims to attract 250,000 international students by 2025 under its Education Development Plan (2015–2025). The new tax may affect this target. The British Council told The Pie News, “While the expanded SST will not affect Malaysian higher education students (who form the bulk of students from Malaysia) the imposition of SST could well impact enrolments in UK transnational education (TNE) programs, which are mainly run in collaboration with private local institution partners and receive a significant number of international students. This could also impact Malaysia’s attractiveness as a study destination, especially amongst students from developing countries who can be price sensitive”.

The British Council advised UK institutions to consult local partners for clarity and offered to connect them with tax professionals. Malaysia has long worked with UK institutions for delivering UK qualifications locally.