8% Service Tax Amendment for Business Policies
Dear Business Customers,
Following the gazetting of the Service Tax (Rate of Tax) (Amendment) Order 2024 (“Order”) on 26 February 2024, please be informed that the Service Tax (“ST”) rate for policies purchased for business purposes has been increased to 8%, effective from 1 March 2024.
Please note that policies purchased for non-business purposes, such as those purchased by individuals for themselves or their family members, are not affected by this change.
Should you require further information on ST, please visit the Royal Malaysian Customs Department’s SST Official Website at http://mysst.customs.gov.my.
Frequently Asked Questions (FAQs)
What is the Order ruling of ST rate from 6% to 8% about?
The Order requires all business policies to be subjected to the new ST rate i.e., from 6 % to 8%. Please note that the Order does not apply to non-business policies.
When will the Order take effect?
The Order is effective from 1 March 2024 onwards.
What will be the impact of the Order?
The Order impacts business customers who own the following policies:
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New business policies
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Policies under renewal
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Premium related changes (endorsements)
Are there any changes to my current business policy premium?
Starting from 1 March 2024, any payments due for your current in-force business policy will be subject to the new ST rate of 8%. In addition, any renewals or new business policies purchased on or after 1 March 2024 onwards will also be subject to the new ST tax rate of 8%.
As an owner of business policy, do I need to take any action with this increase in ST?
No action is required from the owner of business policy. Please ensure your premium payable is inclusive of the new revised ST rate. We recommend reviewing your policy details and contacting your Prudential Wealth Planner or Bank Representative if you have any questions.
How will this Order impact my future business policy renewals?
Any future business policy renewals on or after 1 March 2024 onwards will be subjected to the new ST rate of 8%.