Services Tax

• Service tax is a tax charged and levied on taxable services provided by any taxable person in Malaysia in the course and furtherance of business.
• Taxable person is any person who provides a taxable service in Malaysia and is prescribed to be a taxable person.
• Taxable service is any service which is prescribed to be a taxable service.

Service Tax registrants such as Sun Life Malaysia is allowed to charge and collect the Service Tax.

Life insurance policy or family takaful contract sold to an individual is not a taxable service and hence, the premium or contribution is not subject to Service Tax. However, life insurance policy or family takaful contract sold to a business organisation is a taxable service and hence, the premium or contribution is subject to Service Tax. The Service Tax will increase from the current rate of 6% to 8% with effect from 1 March 2024 and there will be no issuance of new policy/contract.

No. This service tax will not affect the surrender value and/or maturity value of my policy/contract. To find out about the amount of the surrender value and/or maturity value, please contact your advisor.

The ST will be increased from the current rate of 6% to 8% with effect from 1 March 2024 for selected taxable services, including the insurance/takaful sector. Therefore, the ST for your insurance policy/takaful certificate will be revised accordingly.

If full payment is received before 1 March 2024, the ST rate remains at 6%.

The ST rate is 6% for the coverage period before 1 March 2024, while the applicable ST rate for the coverage period provided on or after 1 March 2024 is 8%.