What are the taxable and non-taxable services in Malaysia? (Part V)

Taxable persons and services under the Second Schedule of the Service Tax Regulations 1975 are:
Group G: Other service providers
Taxable Persons Taxable Services
Subheading I

1. Insurance companies registered under the relevant laws for the time being in force.
Provision of:
  • all types of insurance policies to all business organisations;
  • individual insurance policies paid by employers;
  • transfer ownership of insurance policy except collateral assignment of the individual policy to a bank;
  • investment linked single premium policies to protect interests of companies' directors or managers;
  • insurance policies issued to joint management councils to insure business premises;
  • insurance policy services related to oil and gas exploration activities in Malaysia including offshore.
Non-Taxable Services
Provision of:
  • personal insurance;
  • personal investment linked single premium policies;
  • insurance policies to cover risks outside Malaysia;
  • insurance policies issued to joint management councils to insure residential premises;
  • insurance policies to cover risks relating to the international transportation of goods:
    • from a place outside Malaysia to a place outside Malaysia;
    • from a place within Malaysia to a place outside Malaysia; or
    • from a place outside Malaysia to a place within Malaysia;

    and insurance policies to cover risks relating to transportation of goods within Malaysia that forms part of the transportation to/fro outside Malaysia where the coverage is provided by the same person;
  • export credit insurance policies to local exporters, banks or investors to cover risks outside Malaysia relating to the export of goods, services or investments;
  • insurance policies for education institutions or religious bodies.
Taxable Persons Taxable Services
2. Communication services providers registered or licensed under the Communication and Multimedia Act 1998 [Act 588] Provision of:
  • telecommunication services in the form of telephone, facsimile, telemail, paging, cellular phone (postpaid and prepaid), telex, bandwidth service or value added services;
  • domestic roaming services;
  • public phones using calling cards or credit cards;
  • subscription fees for paid television broadcasting services.
Non-Taxable Services
Provision of:
  • bandwidth services (ISDN, leased line, data transmission) for infrastructure, resale or internet;
  • coin-operated public phones;
  • voice over internet protocol (VOIP);
  • internet services such as TMNet and Streamyx;
  • web hosting or server co-location services;
  • internet protocol television (IPTV).

Service tax will be abolished on March 31, 2015 with the implementation of Goods and Services Tax (GST) on April 1, 2015.

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Knowledge Base ID :   1547
Last Reviewed :   July 1, 2014
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