Malaysia expands MRO service-tax exemption to military-approved organisations

Military-approved MRO category added

Service Tax Policy No. 6/2024 (Amendment No. 3) concerns exemptions for maintenance, repair and overhaul, or MRO, services. The MySST register dates the amendment 2 November 2026. Issued under sections 34(3)(a) and 34(4) of the Service Tax Act 2018, it adds maintenance organisations approved by Malaysia’s Director General Technical Airworthiness to the eligible provider categories. MRO services supplied by those organisations are exempt for the period from 22 September 2026 through 31 December 2027.^[1][2]

Existing provider and customer conditions remain

The existing eligible providers remain organisations approved by the Civil Aviation Authority of Malaysia and shipbuilding or ship-repair companies approved by the Ministry of Investment, Trade and Industry or the Malaysian Investment Development Authority. The policy retains the exemption period from 1 March 2024 to 31 December 2027 for those categories.^[2]

Eligible recipients include Malaysian airlines holding an air operator certificate, companies operating Malaysian-registered ships, federal and state government departments, and foreign companies receiving Malaysian MRO services for foreign-going aircraft or ships. For foreign recipients, the policy applies from 1 September 2025 to 31 December 2027 and requires foreign equipment or components imported for the work to be re-exported after completion.^[2]

Earlier transactions are not reopened

The amendment clarifies that service tax already collected must be accounted for to Customs. No refund is available where MRO services were supplied before the applicable exemption start date. The policy does not announce a new return, application deadline or registration procedure, so it should not be treated as authority to alter ordinary filing obligations or reclaim tax on pre-effective services.^[2]

Checks before applying the exemption

Affected aviation and maritime businesses should map each supply to the provider approval, customer category, asset registration or foreign-going status, service date and any re-export condition before treating it as exempt. The policy is available in Malay; no official English translation was found, and the underlying accreditation procedures were not examined.^[1][2]