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Industry Guide:

Insurance and Takaful

 

Please click here to download complete guide.

 

FREQUENTLY ASKED QUESTIONS

Insurance Products, Premiums and Fee

1. How is GST calculated on a general policy premium sold to a registered person?

The GST incurred is as shown in the following example: 

Example 26

Basic premium                        780.00

Loading                                    300.00

Total                                        1080.00

NCD                (-) 450.00

Gross premium                       630.00

Rebate            (-) 40.00          590.00

GST (6%)                                   35.40

Stamp duty                                10.00

Premium payable                  635.40


2. An insurer or takaful operator sell a liability insurance policy plan covering all phases of the work done including towing, hook up, installation and commissioning process to a shipbuilder. The shipbuilder carries out vessel conversion services at a local shipyard for a foreign ship owner and eventually tows the vessel out to international waters for the benefit of the foreign ship owner. What is the GST treatment on the single premium on the insurance plan where the plan is renewable annually?

The shipbuilder’s liability insurance policy will be subject to GST at the standard rate.


3. Under the guidelines for Islamic financial services on international currencies issued by Bank Negara, a licensed international takaful operator (ITO) incorporated as an entity/branch in Malaysia may conduct non-ringgit general and family takaful business and retakaful businesses. Presently, ITOs enjoy full income tax exemption for a period of 10 years. Are they also such similar treatment under the GST regime?

There will be no GST exemption for all taxable supplies made by ITOs. 


4. What is the GST implication on the personal accident policies (PA) sold to pupils studying in public or private schools, colleges, universities and other institutions of higher learning?

The insurance policies sold to students in educational institutions will be subject to GST at a standard rate.


5. What is the GST implication on the PA policies purchased by MARA from a local insurer or takaful operator to insure their scholars studying in universities and other institutions of higher learning in Australia?

The supply of a group PA to MARA for its scholars will be subject to GST at a zero rate.


6. What is the GST implication on the PA policies purchased by an Educational Institution from Indonesia from a registered insurer or takaful operator in Malaysia to insure their scholars studying in universities and other institutions of higher learning in Malaysia?

The supply of a group PA to the Educational Institution from Indonesia for its scholars in Malaysia will be subject to GST at a standard rate.


7. What is the GST implication on a Personal Accident (PA) policy plan sold in a package with other taxable goods or services?

Since the supply of goods or services and PA are all taxable supplies, the supplier need not apportion the single charge. GST is chargeable on the single charge. However, if the package consists of general insurance and an exempt supply, the supplier is required to apportion the single charge according to the proportion for exempt and taxable supplies. The proportion for the exempt supply will not be subject to GST while the proportion for general insurance will be standard rated.


8. What is the GST implication on a life policy plan sold in a package with other taxable goods?

Since life policy is an exempt supply and goods are taxable supplies, the supplier is required to apportion the single charge. The proportion for the exempt supply will not be subject to GST while the proportion for taxable supply will be standard rated.


9. What is the GST implication on the premium for general insurance to cover a property outside of Malaysia?

Since the property is located outside of Malaysia, the premium will not be subject to GST being a zero-rated supply. 


10. What is the GST implication on the premium for general insurance to cover a property in Malaysia owned by a foreigner who is not in Malaysia at the time the insurance coverage takes place?

The premium charged will be subject to GST at a standard rate.


11. Are annual registration fees imposed on insurers/takaful operators regulated by the Financial Services Act 2013 and the Islamic Financial Services Act 2013 subject to GST?

No, such regulated fees are not subject to GST. Similarly, the licensing fee requirement on offshore insurer or takaful operators regulated by the Labuan Financial Services and Securities Act 2010 and Labuan Islamic Financial Services and Securities Act 2010 is also not subject to GST.


12. What is the GST treatment on the policy surrender fee charged and the cash value paid out by the insurer or takaful operator when the policyholder surrenders a policy?

The surrender fee will be subject to GST at a standard rate while the cash value paid out is not subject to GST.


13. What is the GST implication on stand-alone non-life policies issued by life insurer or family takaful operator?

The stand-alone non-life riders will be subject to GST at the standard rate.


14. Are offshore insurance companies supplying life reinsurance or family retakaful services to recipients in Kuala Lumpur subject to GST?

They do not have to register, as those supplies are exempt supplies. However, if they supply taxable insurance services to recipients in the Principal Customs Area (PCA) where their annual taxable turnover exceeds the required threshold, they need to register.


15. Under a superannuation scheme, a member to the scheme contributes to the life insurer or takaful operator administering the scheme. At the time of maturity of the scheme, the insurer or takaful operator will pay the member of the scheme monies accumulated together with the interest earned in one lump sum or in a series of payments. Are the contribution and the payout subject to GST?

The contribution made by a member of a superannuation scheme and the payout by the insurer or takaful operator is not subject to GST.


16. I supply investment-linked takaful or investment–linked insurance plans and charge fees such as establishment cost/initial charge (for policy issuance and marketing), monthly management fee and monthly managed portfolio fee (for managing the investments of the funds), policy fee (ongoing administration costs of the premium plan) and bank handling fees to my policyholders. Are these fees subject to GST?

The fees charged are subject to GST at a standard rate.


17. What are the GST implications in the event of a cancellation of a general insurance policy, which entails a refund of premium to the policyholder? 

The insurer or takaful operator needs to raise a credit note when he refunds the premium, subsequently adjust his accounts, and reduces output tax in the return for the taxable period in which the credit note was issued.


18. Fees are charged for processing termination of group and individual ordinary family plans due to expiry and other causes such as switching to other plans. Are the fees subject to GST? 

Yes, the fees are subject to GST at a standard rate.


19. Is general insurance sold to nonprofit organisations or charitable organisations subject to GST?

Yes, the insurance services is subject to GST at a standard rate.


20. I am a marine insurer registered for GST and I provide marine hull and machinery and ship insurance for my clients’ ships, vessel or yacht. Are such general insurance subject to GST?

The insurance services you cover on ships, vessel or yacht that are local or foreign bound is subject to GST at a standard rate. However, if the supply of such insurance coverage is for ships, vessel or yacht sailing outside Malaysian waters, the supply is zero rated e.g. the ship insurance is to cover a ship that sails from Port Klang to ports of call outside Malaysia only and not from Port Klang to Kota Kinabalu Port and later to Muara Port, Brunei.


21. For Director & Officer Liability Policy (D&O), the premium is split into two where the Company pays 95% and the directors pay 5%. Currently, the insurer issues a policy to the Company and debit notes to both the company and the directors based on the percentage of 95% and 5% respectively. Some insurers do issue one debit note for such policy and impose service tax on the 95% component because directors pay the other 5%. Are both components subject to GST after 1 April 2015?

Under the Service Tax Act 1975, no service tax is imposed on a non-business entity i.e. the directors where it relates to a supply of insurance services. However, effective 1 April 2015, both components of the premium is subject to GST.
 


Time of Supply 

22. I am a GST registered insurer and I receive premium payments from my insurance agent for various policies (life and general policies) sold where the insurance agent has issued a cover notes to the policyholder. Upon receipt of the payments, I am but unable to match the premium payments with the type of policy sold. What are my obligations as a taxpayer on the payments I have received?

Your time of supply to account for tax on the supply of insurance services is the taxable period in which your agent issued the cover notes. Hence, you must identify the type of supply you are making upon receiving the premium payments.


23. I am a GST registered insurer; provide insurance coverage for a mega project beginning from 1 January 2015 to 31 December 2018 and issue I issue a tax invoice for the premium on 15 June 2015. The delay is due to underwriting the risk elements and coverage. When is my time of supply?

Your time of supply is at the time you issue the tax invoice that is on 15 June 2015.


24. When is payment treated as received by me in the case where I (GST registered insurer) am required to account for GST when I receive a premium payment from my agent?

The premium payment is treated as received by you when the payment is credited into your bank account.
 

Mixed Supplies and GST Treatment

25. What is the GST treatment on a medical insurance plan and a PA plan? 

Medical insurance and PA are both taxable supplies and they are subject to GST at a standard rate. The same also applies to similar products provided by general takaful and family takaful operators.


26. What is the GST implication on non-life policies (personal accident, medical and health policies) attached to individual or group life insurance policies?  

The premium of the non-life policies will be subject to GST at standard rate while the premium for the individual or group life policy will not be subject to GST as it is an exempt supply.

 

Co–Insurance Plan

27. What is the GST implication in a co-insurance or co-takaful arrangement (joint assumption of risk between various insurers/takaful operators) involving general insurance?

The GST implication will depend on the billing arrangement among the coinsurers/co-takaful operators. If the Lead insurer or takaful operator (agent for the other co-insurers/co-takaful operators) bills the customer on behalf of the other co-insurer/co-takaful operator, he is required to charge and account for GST on the whole premium charged. The other co-insurer/co-takaful operator will in turn charge and account GST on their respective share on the premium and subsequently issue a tax invoice to the Lead. The Lead will then claim GST incurred as his input tax credit.

Example 1 

Lead insurer or takaful operator bills the customer

Under a co-insurance arrangement, three co-insurers/co-takaful operators supply a general insurance policy to a customer. The premium is RM200m of which the Lead takes 50% share and the other two co-insurer/co-takaful operators take 25% each. The Lead charges and accounts RM12m as his output tax. His tax invoice to the customer is as follows:

Premium     RM200m

GST 6%      RM 12m

Total            RM212m 

Subsequently, the other two co-insurer/co-takaful operators will issue a tax invoice each to the Lead as follows:

Premium    RM50m

GST 6%     RM 3m

Total           RM53m  

The two co-insurer/co-takaful operators will each account RM3m as their output tax and the Lead will claim a total of RM6m as input tax in the relevant taxable period.


Example 2 

Each co-insurer/co-takaful operator bills customer individually.

Under such an arrangement, each co-insurer/co-takaful operator is required to charge and account GST according to their respective share.

Using the above example, the Lead will charge and account GST as follows:

Premium    RM100m

GST 6%     RM 6m

Total           RM106m

and the other two co-insurers/co-takaful operators will each charge and account GST as follows: 

Premium   RM50m

GST 6%    RM 3m

Total          RM53m 


28. As a Lead insurance company in a co-insurance arrangement, I am responsible for administering various aspects of the insurance policy such as handling claims and insurance documents. I subsequently levy a charge for these services to the other insurance companies sharing the risk based on percentages. Is this charge subject to GST?

Such charges are subject to GST at a standard rate. 
 


Insurance Product with Local and Overseas Coverage

29. What is the GST implication on policies that cover either local and overseas employment or study; and health insurance, which includes overseas medical coverage?

Such supplies of global plan and worldwide coverage policies will be subject to GST. Further examples include key man, public liability insurance, and executive or corporate travel policies.


30. What is the GST implication on policies where the supply of general insurance services covers a domestic and an international component of the risk? 

There are two (2) GST treatments:

(a) Where the single general policy covers a domestic and international component of risk, the insurance services is subject to GST.

(b) Where there are two separate policies where one covers the international component and another covers a domestic risk, then the coverage outside Malaysia is zero-  rated and the latter is standard rated. 


31. What is the GST implication on policies where the supply of life insurance services is global where it provides coverage in and outside Malaysia to the policyholder?

The supply of life insurance is an exempt supply.
 


Investment Activities

32. What is the GST treatment on investment activities undertaken by takaful operators from funds based on contributions collected from general takaful and family takaful supplies? 

Generally, investment activities such as trading of equities, bonds, government securities, loans and fixed deposits are not subject to GST. However, investment in the form of buying and selling of commercial properties or rental of such properties are subject to GST at a standard rate.


33. What is the GST treatment on surplus sharing in the form of Ma’asyi bonus and income pay out – income derived from ‘investment’ made by takaful operators for the participants?

Investment income payout is not subject to GST.
 


Discount

34. How is GST calculated on the premium if an insurance agent gives a discount on the premium for a general product to a regular client?

Where an insurer or takaful operator gives a discount on the premium, GST is charged on the discounted amount. However, for discounts given by agents on the premium, it will not be taken into account for purposes of GST as the agents are not regulated by Bank Negara Malaysia to give such discounts.
 


Registration of Insurance Intermediaries 

35. I am an employee of an insurance company. At the same time, I act as an agent to sell my company’s products. Am I required to register for GST?

Yes, you are required to register for GST if your past taxable turnover for the period of twelve months has exceeded the threshold or the future taxable turnover is expected to reach the threshold. In calculating the taxable turnover, you only have to take into consideration the commission received in your role acting as an insurance agent.


36. If an unregistered insurance agent’s annual taxable turnover fluctuates above and below the threshold from year to year, what are his liability to be registered and his eligibility to seek cancellation of registration?

The insurance agent may register voluntarily to become a registered person although his annual taxable turnover is below RM500,000. However, he is required to stay in the system for a period of no less than 2 years before he may seek to deregister.


37. I am a resident agent for several non-resident principals and will register for GST. Do I have to register separately for each principal?

No, you are required to make one registration only although you may have several agencies since you deal with more than one principal.
 


Insurance Related Services

38. As a takaful operator, I provide facilities/services (free office space and utilities) to my agents and brokers for which there is no consideration for the supply. What is the GST treatment on these free facilities/services?

Such supplies by the takaful operator will not be subject to GST since there is no consideration received. Similar GST rules will apply if conventional insurance companies supply those services.


39. I employ a loss adjuster who assesses the losses of my company’s insurance claims. What is the GST treatment on my employee’s services?

Such a supply will not be subject to GST since the person supplying the services is your employee


40. What is the GST treatment on insurance policies sold by way of telephone sales services?

General insurance policies will be standard rated while life insurance policies will be exempt irrespective of whether they are sold by conventional methods, through telephone sales or online. However, if the marketer at the call centre is remunerated by way of commission or flat rate fee, he is required to register for GST if his past taxable turnover for the period of twelve months has exceeded the threshold or the future taxable turnover is expected to reach the threshold.


41. In the course of selling insurance, some agents or brokers provide nonfinancial services such as advice on risk-control programs, insurance evaluation and financial or estate planning, are these services subject to GST?  

If non-financial services are provided by an insurance agent or broker for which there is a consideration for the services supplied, such services are subject to GST at a standard rate. However, if there is no consideration for the services then there will no GST charged accordingly.


42. What is the GST treatment on intermediary insurance services performed in Malaysia by insurance agents or brokers for a non-resident principal (insurer or takaful operator)? 

The services is a taxable supply and subject to GST at a standard rate.


43. What are the GST implications on expenses such as travelling and accommodation expenses incurred in the course of investigating an insurance claim by the insurer’s/takaful operator’s employee?  

The insurer or takaful operator will have to pay GST on those expenses and subsequently claim GST incurred on input.


44. What are the GST implication on expenses that insurers incur in relation to medical check-up for potential customers made in the furtherance of the insurers’ business and not fringe benefits provided to the insurers’ employees?

The insurer is allowed to claim the input tax incurred for such expenses if it relates to making a supply of general insurance services. It would then be the responsibility of the insurer to provide supporting documentations during an audit exercise to substantiate the claim made.
 


Fees and Commissions by Agents and Brokers

45. Are commissions and brokerage earned by insurance agents and brokers relating to life insurance exempted from GST?

No, they are not exempted from GST. Commissions will be subject to GST at a standard rate irrespective of whether it relates to a contract of general or life insurance.


46. Are the value added services such as fees for arranging insurance for specific projects and liability exposure provided by insurance brokers subject to GST?  

Yes, it is subject to GST at a standard rate.


47. An insurance company can fund either directly or indirectly an insurance agent’s expenses in recognition of the volume of business generated by him. This funding is known as soft commission. Is soft commission subject to GST?

There is no supply made by the insurer or takaful operator to the agents when he funds their expenses in this situation. Hence, soft commission is not a consideration for a supply and not subject to GST. 


48. When my insurance company makes a certain amount of profit, I share the profits with my insurance agents. Is profit commission subject to GST?

There is no supply made by the insurer or takaful operator to the agents when he shares the profits with them. Hence, profit commission is not a consideration for a supply and not subject to GST.


49. Does the same GST treatment apply if a life insurance company provides profit and soft commissions to banks, direct marketers or insurance brokers?

Yes, the GST treatment is the same.


50. An investment bank acting as an insurance agent purchases a general insurance for an employee and requests that the commission earned to contra off from the premium charged. How is GST calculated on such transaction?   

Since the supply of general insurance and commission are taxable supplies, both insurance company and investment bank have to issue tax invoices. The GST is calculated as below:

Annual premium charged -  RM1,500.00

Commissioned earned - RM 100.00

Tax Invoice Issued by Insurance Company:

Annual premium                              RM1,500.00

GST 6%                                             RM 90.00

Total                                                   RM1,590.00


Tax Invoice Issued by Investment Bank:

Commission                                     RM 100.00

GST 6%                                             RM 6.00

Total                                                   RM 106.00

Bank pays insurer                           RM 1,590 – RM106
                                                           = RM 1,484.00


51. I am an insurance agent and provide service of arranging insurance cover before 1 April 2015 and receive my commission from the insurer or takaful operator after 1 April 2015. What is the GST implication on the commission paid to me?

The supply of arranging insurance cover services by the agent will be performed progressively throughout the period of insurance cover and this will be spanning 1 April 2015. The supply of such services before 1 April 2015 will not be subject to GST but the services performed on and after 1 April 2015 will be subject to GST. Hence, the commission received by the agent before 1 April 2015 will not be subject to GST and subsequent commissions paid by the insurer or takaful operator on or after 1 April 2015 will be subject to GST.


52. I am an insurance broker and provide insurance intermediary services for the period of an insurance cover, which was entered into before 1 April 2015, and the cover spans 1 April 2015. What is the GST implication on the fee paid to me?

As the supply you are making is for the duration of the cover spanning 1 April 2015, GST is only payable on the supply or service to the extent that it is made on or after 1 April 2015.


53. Upon the cancellation of a policy, that spans 1 April 2015, a percentage of the premium is refunded and following that some of the original commission is refunded. What is the GST implication on the commission refunded?   

If the pro rata refund is for a progressive supply or a supply made for a period of the policy, then adjustments need to be made if the refund relates to the supply on or after 1 April 2015.

 

Input Tax Credit  

54. I am a resident insurance agent acting for a non-resident principal (insurer or takaful operator). In the course of my business, I incur GST on expenses such as office rentals, utilities and stationeries. Am I entitled to claim the GST paid as my input tax credit?

Since you are making zero rated supplies that are taxable supplies, you are entitled to claim the GST paid as input tax credit (ITC). 

55. As an insurance agent, I incur expenses such as parking charges, petrol purchases for my passenger car and mobile phone charges. Can I claim full ITC on these expenses since I am making taxable supplies?

Yes, you can only claim full input tax recovery on your parking charges, petrol purchases and mobile phone charges provided that the expenses incurred are used for making taxable supplies. If the inputs are used for making taxable supplies and private use, you are required to apportion them by using the standard method.

56. I supply taxable supplies and at the same time offer loans to my clients and my subsidiaries. Am I eligible to claim full ITC for this supply of incidental financial services?

No, you are not eligible because you are also providing loans to clients other than your subsidiaries.

57. As a life insurer or takaful operator, am I entitled to a fixed rate of recovery of input taxes I incur on my acquisitions?   

No, you are not entitled for such recovery of taxes but you may recover using the normal rules of recovery if you make taxable supplies.

58. As a life insurer/family takaful operator, I need to perform a medical assessment as a step or component in the processing of a claim to determine my policyholder’s medical status. Am I entitled to claim input tax incurred on this acquisition?

No, you are not entitled to such a recovery as you are making exempt supplies i.e. supply of life insurance.

59. Is an insurance broker, loss adjuster or insurance agent eligible to claim input tax credits attributable to investment activities such as holding of bonds and shares made by them?

Yes, they are entitled to the input taxes incurred on the investment activities as they are treated as input taxes attributable to taxable supplies.


Tax Invoice

60. As an insurance agent, I submit a submission sheet from time to time to my principal insurance company. This document details the payments for the insurance products sold and my entitlement for commission. Can this document constitute a tax invoice issued by me to the principal?

The submission sheet does not constitute a tax invoice for GST purposes as it does not contain particulars of a tax invoice.

61. Is an offer letter or quotation to a prospective insurance client treated as a tax invoice?

No, this document is not treated as tax invoice because you will not know whether there will be a supply at the time when you issue the document.

62. What kind of invoicing arrangement should the banks comply with if they act as agents (bancassurance) in the name of their principals (insurer or takaful operator)?

The agent banks who act in the name of their principals can issue tax invoices on behalf on their principals. Any tax invoice issued must in the name of the principal containing all particulars of a tax invoice.

63. Can I treat insurance renewal notice (automatic renewal of the insurance as per the anniversary date) as a tax invoice?

You cannot treat the renewal notice as a tax invoice.

64. Can an insurer or takaful operator use a self-billed invoice for the commission due to GST registered agents?   

The insurer or takaful operator may make an application to the Director General if he chooses to use self-billing for the payment of commission to his GST registered insurance agents.


Gifts, Vouchers, Sponsorship, Etc

65. An insurance company sponsored a Creative Photo competition, as it is the company's way of reaching out to the public, which includes giveaways in the form of prize money and trophies. What is the GST treatment on this sponsorship?

For trophies provided in the form of sponsorships for which there is no consideration, the company is required to account for GST if the cost of the trophies to the insurance company is more than RM500. Any sponsorship in the form of money is not subject to GST.

66. A life insurer or family takaful operator gives prospectuses, leaflets and brochures to their insurance agents to assist them in selling the insurance or takaful products. What is the GST implication on this supply?

The supply of prospectuses, leaflets and brochures by the insurer or takaful operator is not subject to GST.

67. If my company arranges an exclusive gala dinner function and sells tables and tokens for the dinner to my insurance agents, is the sale subject to GST?

Yes, the supply of tokens and arranging for dinner for a consideration by the agents will be subject to GST at the standard rate.

68. If I am an International Takaful Operator established as a branch in Malaysia under the Malaysia International Islamic Financial Centre (MIFC) initiative, carrying out non-ringgit (general and family) takaful business and retakaful business in Malaysia with non-residents in international currencies other than Malaysian ringgit. Are my supplies of takaful subject to GST?  

If you carry on takaful business with either residents or non-residents on risks related to land, buildings and goods located in Malaysia, you must charge GST on your general takaful business and you are exempted from charging tax on your family takaful business. However, if the same risk is located outside of Malaysia, then your supply of general and family takaful business is not subject to tax (zero rated supply).

69. Is an insurer or takaful operator or reinsurer or takaful operator allowed to apply to be a member for group registration if he is a non-entity or non-resident but have subsidiaries or branches in Malaysia?

The insurer or takaful operator or reinsurer or takaful operator cannot apply for group registration.


Transitional 

70. As a registered insurer or takaful operator, can I charge service tax on an annual life premium spanning 1 April 2015 before and up to the date before 1 April 2015 and no further taxes is imposed on the premium for the period of cover from 1 April 2015 to the end of the annual cover? 

Yes, you may do so as the provision of life insurance is an exempt supply and not subject to GST. However, if you have charged your policy holder service tax on the annual premium for the period before and after 1 April 2015, then you are required to account for the full sum of service tax when you receive payment from your policyholder.

71. Specific insurance or takaful services supplied on and after 1 April 2015 are not subject to GST (relief from tax). Does this include householder and houseowner policies?

No, it refers to a basic fire policy that provides coverage for the building only and covers loss or damage by fire, lightning or explosion.


Miscellaneous

72. Insurance companies have to contribute 0.25% from the collection of (motor) insurance premiums to the Road Safety Fund managed by the Transport Ministry. Is there a GST liability on this contribution?

This contribution to the Road Safety Fund is not subject to GST.

73. What is the GST implication on the yearly premiums that the financial institutions are required to pay to the Malaysia Deposit Insurance Corporation (MDIC) that administers the deposit insurance system?

The premiums charged by the Malaysia Deposit Insurance Corporation to the insurers will not be subject to GST.

74. An overseas insurance expert (loss arbitrator) is engaged by a GST registered insurer or takaful operator to settle a claims appeal in the Malaysian court. Since the LA is a foreign resident, he will not charge GST on his arbitrage fees. Do I need to account GST on the arbitrage fees as an imported service? 

The arbitrage fees charged will be treated as a supply of imported services received by the insurer or takaful operator. The insurer or takaful operator is required to account GST on the imported services and he is entitled to claim input taxes.

75. Is the annual levy imposed by PIAM on its member companies subject to GST?

Yes, the annual levy charged by PIAM is subject to GST.

76. Is the supply of insurance services by Malaysian Motor Insurance Pool subject to GST?

Yes, the supply is subject to GST at a standard rate. 
 

77. MMIP Services Sdn Bhd provides management services to manage the Malaysia Motor Insurance Pool. Is the supply subject to GST?

Yes, the supply is subject to GST at a standard rate.

78. The sale of fire insurance cover for a block of condominium arranged by the joint management body (JMB) is subject to GST. How does the JMB charge the owners of the commercial lots in the condominium who which to claim input tax on the premium paid for the cover?

When the JMB who is a registered person issues a tax invoice for his management fee, he can include the premium (inclusive GST) charges in that same tax invoice to the owners.

79. The takaful operator charges a fee to the participant’s fund when the participant surrenders his certificate to the takaful operator. Is this charge subject to GST?  

Yes, the fee is subject to GST at a standard rate.

80. The contributions collected by a takaful operator in a personal accident takaful plan credited into the participants’ fund. Is the contribution subject to GST when the contribution is credited into the fund?

The contribution is subject to GST when the takaful operator bills the participant for the supply of the takaful plan.

81. What is an example of an inter fund transfer that is not subject to GST?  

An example is as described below:

Premiums on life insurance received from policyholders will be split into 2 portions i.e. allocated and unallocated premium. The allocated premium is invested into various investment funds while the unallocated premium is placed in the insurance fund. Periodically, the premium income from the investment fund is transferred to the insurance fund to cover cost of insurance. Such transfer of funds is not a supply for GST purposes and is not subject to GST.
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