Saving on Service Tax | Your Insurance Policy

Just received news concerning the new service tax application – mainly to do with the timing and cut-off date relevant to the transition process, from the existing rate of 5% to 6%.

On December 2nd, 2010 the Ministry of Finance jointly with the Malaysian Royal Customs & Excise held a meeting with various professional bodies/trade associations to discuss the proposed transition rules for the change in the service tax rate.

The following image is self-explanatory……


service tax 2011

What a drag! Some new things again...?

In short…. if any of the customers renewed or purchased a new policy before 1 January, 2011 the service tax rate applicable should be 5% even if the inception date is on or after 1 January 2011. This means insurance customers have an alternative to renew early and save on the 1%.

Something like RAKYAT DI DAHULUKAN!

This would again translate into additional problems for the insurance industry – something we should find hard to resolve as the existing service tax application is based on INCEPTION DATE rather than the DATE OF TRANSACTION.

What do you think?

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5 comments for “Saving on Service Tax | Your Insurance Policy

  1. Alfred Soh
    August 10, 2011 at 17:08

    Any service tax for church buying insurance policies?
    Thank you.

    • August 26, 2011 at 14:26

      If the church is properly registered with the relevant bodies then service tax can be waived. Usually churches under the banner of established Christian groups like Methodist, Baptist, Calvary, Lutheran, or similar we should not have any issue.

  2. Fariz Faruk
    December 13, 2010 at 12:26

    Dear MalaysiaInsurance,

    Regarding the table that you posted above, may I know it’s source?

    Furthermore, do you have a copy of the minute (or direct me to the relevant website) of the meeting between the Ministry of Finance jointly with the Malaysian Royal Customs & Excise with various professional bodies/trade associations on the changes in service tax rate?

    Thank you.

    • December 18, 2010 at 00:00

      Our source is a staff of insurance company who happened to attend the briefing. We do not have any minutes to-date. Generally most insurers are finding this difficult to resolve – mainly is about the difficulties in tweaking both the back-end and the front-end computer system to suit this adoption. Moreover, this is a short term thing….

  3. December 12, 2010 at 15:00

    [New Post] Saving on Service Tax | Your Insurance Policy – via #twitoaster http://www.malaysiainsurance.info/manage

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