Malaysia Clarifies Foreign Currency Exchange
Rate Rules for Tax Invoices

The Royal Malaysian Customs Department (JKDM) has formalised the rules governing the conversion of foreign currency amounts into Malaysian Ringgit (MYR) on service tax and sales tax invoices through General Decision No. 01/2026. The regulation, effective 31 March 2026, is issued under Section 41 of the Service Tax Act 2018 and Section 42 of the Sales Tax Act 2018.

Under the new rules, registered service tax persons and registered sales tax manufacturers that issue invoices stating amounts in a foreign currency must also express those amounts in Ringgit. The applicable exchange rate may be sourced from Bank Negara Malaysia, any commercial bank registered under BNM, international news agencies such as Bloomberg, Reuters, or Oanda, or foreign central banks including the European Central Bank and the Federal Reserve Bank of New York.

The chosen rate source must be applied consistently for at least one year from the end of the relevant accounting period. Businesses wishing to use an alternative rate source must submit a written application to the relevant Tax Policy Branch at JKDM Headquarters for approval by the Director General of Customs.

For goods imports, the exchange rate used to calculate customs duty, excise duty, and sales tax must be the selling rate set by the Director General of Customs at the time of importation. For imported taxable services, conversion is to be based on the selling rate prevailing in Malaysia at the time the service is provided.