All general insurance policies are subject to the Goods and Services Tax (GST) unless the risk insured is outside Malaysia, according the General Insurance Association of Malaysia (PIAM). Examples of insurance contracts covering risks outside Malaysia are:
- personal accident, and
- marine policies
PIAM issued a statement Wednesday outlining 15 of the most commonly asked questions explaining how GST implementation could affect their general insurance policies.
On how a policyholder would be charged for GST on premiums, PIAM said that for imposition of GST on general insurance policies, insurance companies would issue a tax invoice for the premium to be charged and the appropriate GST.
He also said GST for existing policies after April 1 would be calculated on a pro-rated basis.
On whether a person with a policy due on April 12, for example, was exempted from GST if they paid their premium before April 1, PIAM said the policyholder must pay the full GST for 12 months on the annual premium if the renewal was done earlier.
“Your insurance company may collect this amount from you on or after April 1,”
said the statement.
The statement also said that policyholders who currently hold valid insurance policies with member companies of PIAM have been notified of GST implementation through a clause incorporated in all general insurance renewal notices and policy schedules.
Those who want more information on the impact of GST on general insurance policies should contact the PIAM information centre via email at email@example.com or by calling 03-2274 7395 or 03-2274 7399.
Source: The Star Online