Among ASEAN countries, the Philippines imposes a 5% premium tax on life insurance while Malaysia imposes a 5% service tax. On the other hand, Cambodia imposes a minimal rate of 0.5% for insurance or reinsurance of risk received, while Thailand subjects life insurance to a specific business tax (SBT) of 2.5%
Singapore treats life insurance and reinsurance premiums as either goods or services tax (GST) exempt or zero-rated. In Indonesia, insurance services are non-taxable services while Vietnam treats life insurance as exempt from the VAT.
The Philippines imposes a Documentary Stamp Tax (DST) on life insurance at an ad valorem rate of 0.25% while Malaysia imposes a Stamp Duty of RM10 on insurance policy except life policy where the sum insured does not exceed RM5,000. Thailand also imposes a fixed stamp duty on reinsurance policies. Singapore does not impose stamp duty on insurance policies.
In addition to these taxes, the Philippines and Thailand are the only countries imposing a municipal tax of 0.2% and 10%, respectively.
On the other hand, non-life insurance in the Philippines is subject to the 12% VAT, while Thailand imposes a VAT at a reduced rate of 7% from the current 10% VAT extended until October 1, 2010 based on total premiums collected. Meanwhile, Singapore subjects non-life insurance to a 5% GST which is also based on premium, while international marine and aviation insurance, travel insurance and export credit insurance are deemed zero-rated for GST purposes. A 5% service tax is imposed on all types of insurance policies in Malaysia.
With regard to DST/stamp duty, the Philippines imposes a 12.5% rate compared to Thailand’s 0.5% and a fixed stamp duty of Baht1.00 on reinsurance policies while Malaysia imposes a stamp duty at a rate of RM10.
The same ratio of municipal tax on non-life insurance is imposed by the Philippines and Thailand.
