Unveiling the Complexity of GST-registered Insurance Products

Generally, the provision of an insurance contract by a GST-registered insurance company in Singapore is a taxable supply of services and is GST-chargeable on insurance premiums at standard GST rate. However, certain insurance services qualify for zero-rating and others are exempted from GST and in such cases no GST is chargeable.

Life Insurance

Taking for instance a life policy issued by a life insurance company, only premiums arising from life insurance contracts and policy and administration fees incidental to their provision qualify for exemption. As such, not all policies issued by life insurance companies are exempted from GST.

On the other hand, personal accident and medical insurance policies do not qualify for GST exemption. However, the treatment differs if these policies are riders to certain life policies.

With regards to direct insurance services, they can be zero-rated if certain conditions are met.

General Insurance

For general insurance products such as motor, fire or workmen’s compensation, different treatment applies. 

As such, the GST treatment of various products offered by insurance companies is complex and will require detailed understanding of the rules and the nature of the products to determine the correct GST treatment.

Need Assistance or Clarification? 

At Forvis Mazars, our tax team has the expertise to deal with the tax implications of complex insurance products. We can advise businesses on GST-related matters pertaining to the different life and general insurance policies and services provided by insurance companies. We can assist in conducting a GST health check on the processes and treatments adopted for the various products in your business’s GST returns, or assist in GST compliance and advisory requirements, etc.