General Insurance Policies Subject To 6% GST
All general insurance policies are subject to the Goods and Services Tax (GST) unless the risk insured is for coverage outside Malaysia, according to the General Insurance Association of Malaysia (PIAM),
Examples of insurance coverage for risks outside Malaysia include travel, personal accident and marine policies.
On how a policyholder would be charged GST for premiums on general insurance policies, PIAM said that insurance companies would issue a tax invoice containing details of the premium and GST charges.
GST for existing policies after April 1 would be calculated on a pro-rated basis.
For example, if a person has a policy due on April 12 but had paid their premium before April 1, they would still not be exempted from GST charges. Instead, the policyholder must pay GST for 12 months on the annual premium if the renewal was done earlier.
The insurance company can choose to collect this amount from policyholders on or after April 1.
Policyholders who currently hold valid insurance policies with insurance companies under PIAM have been notified of GST implementation through a clause incorporated in all renewal notices and policy schedules.