Frequently Asked Questions
for Sales and Service Tax

Sales Tax and Service Tax (“SST”) is a consumption tax that is charged on the sale of prescribed goods and services. It is an indirect tax system officially reintroduced on 1 September 2018 by the Malaysian Government to replace the former Goods and Services Tax (GST) system.

SST is made up of two separate taxes:

• Sales Tax
  This applies to taxable goods either manufactured in or imported into Malaysia
  
  
• Service Tax
  This applies to taxable services provided by taxable persons in Malaysia. The list of these taxable persons and taxable services can be found in the First Schedule of the Service Tax Regulation 2018. 

Service Tax is currently levied at 8% of the insurance premium. The new rate was effective from 1 March 2024.

If you purchase an insurance policy which is not exempted from Service Tax, an additional 8% will be applied on the insurance premium and you need to pay the full amount, inclusive of this Service Tax. 

A person registered to charge Sales Tax for taxable goods or Service Tax for taxable service provided must issue an invoice with the prescribed particulars.

Yes, TMIM is registered for Service Tax purposes with the information as below:

- Company : Tokio Marine Insurans (Malaysia) Berhad
- SST Number : W10-1808-31013285
- Date : 1^st September 2018

The collector and enforcement authority of Service Tax is Royal Malaysian Customs Department ("Customs" or "RMCD") and you may refer to the official website of at ttps://mysst.customs.gov.my/ for Service Tax related information, legislation and guidelines.

TMIM is a taxable entity person providing general insurance, which is a taxable service defined under the Service Tax Act 2018 and other applicable acts, regulations, and orders (“Laws”). Hence, the Company is obligated to charge and collect Service Tax on insurance premiums from its policyholders, except for insurance policies that are specifically exempted under the Laws.

Since TMIM is not a manufacturer of goods, Sales Tax is not applicable to TMIM.

Insurance agency service is currently not a taxable service, as such, insurance agents are not required to register and charge Service Tax for their services. Instead, Service Tax on your insurance premium is charged by the insurance company which the insurance agent represents, with the agent collecting the tax on behalf of the insurance company.

All general insurance policies are subject to Service Tax except for the following policies:

• Medical insurance on an individual.
• Insurance to cover risks outside Malaysia. This includes the insuring of risks relating to the transportation of passengers or goods:
  1. From a place outside Malaysia to another place outside Malaysia; or
  2. From the last exit point in Malaysia to any place in another country; or
  3. From a place outside Malaysia to the first entry point in Malaysia.

Where the service of insurance coverage is from a point outside Malaysia to a point inside Malaysia in a single insurance contract which covers both international and domestic movements of goods, the domestic insurance coverage is not subject to Service Tax.

• Insurance to cover registered educational institutions and religious organizations.
• Insurance to cover any risks incurred in the making of advances or the granting of credit directly relating to the export of goods, services or investments outside Malaysia.

Service Tax exemption is available for services provided within or between Designated Areas (Labuan, Langkawi and Tioman) and Special Areas (free zone, licensed warehouse, licensed manufacturing warehouse and Joint Development Areas), by any person whose principal place of business is in the Designated Areas or Special Areas.

TMIM does not have a principal place of business in these areas, hence this exemption is not available to the Company. TMIM will charge and collect Service Tax of 8% for insurance coverage provided to these areas.

Service Tax is chargeable on the discounted price or price after rebate, where applicable.