Three subsidiary legislation were gazetted in late-December 2020 in relation to exemption from stamp duty for certain insurance products. All three laws will come into operation on 1 January 2022.
 
Stamp Duty (Exemption) (No. 5) 2018 (Amendment) Order 2021 [P.U.(A) 462/2021]
 
The Stamp Duty (Exemption) (No. 5) 2018 [P.U.(A) 359/2018] (‘Principal Order’) exempts from stamp duty any insurance policy or takaful certificate for Perlindungan Tenang products issued by an insurer licensed under the Financial Services Act 2013 (‘licensed insurer’) or a takaful operator licensed under the Islamic Financial Services Act 2013 (‘licensed takaful operator’)  with an annual premium or takaful contribution not exceeding RM100 per annum.
 
The Stamp Duty (Exemption) (No. 5) 2018 (Amendment) Order 2021 amends the Principal Order by increasing the exemption threshold of annual premium or takaful contribution of RM100 per annum to RM150 per annum for Perlindungan Tenang products.
 
The exemption under the Principal Order applies to insurance policies or takaful certificates for Perlindungan Tenang products issued on or after 1 January 2019 but no later than 31 December 2025.¹
 
For the purposes of the Principal Order, ‘Perlindungan Tenang’ products refer to insurance or takaful products approved by Bank Negara Malaysia (‘BNM’) to be offered by a licensed insurer or a licensed takaful operator under the ‘Perlindungan Tenang’ initiative.
 
Stamp Duty (Exemption) (No. 15) Order 2021 [P.U.(A) 464/2021]
 
The Stamp Duty (Exemption) (No. 15) Order 2021 (‘Exemption Order No. 15’) exempts from stamp duty any insurance policy or takaful certificate for product issued by a licensed insurer or a licensed takaful operator to micro enterprise or small and medium enterprises with an annual premium or takaful contribution not exceeding RM250 per annum.
 
The exemption under Exemption Order No. 15 applies to insurance policies or takaful certificates issued on or after 1 January 2022 but no later than 31 December 2025.
 
For the purposes of Exemption Order No. 15:

Stamp Duty (Exemption) (No. 16) Order 2021 [P.U.(A) 465/2021]
 
The Stamp Duty (Exemption) (No. 16) Order 2021 (‘Exemption Order No. 16’) exempts from stamp duty any insurance policy or takaful certificate for product issued by a licensed insurer or a licensed takaful operator to an individual with an annual premium or takaful contribution not exceeding RM150 per annum.
 
The exemption under Exemption Order No. 16 applies to insurance policies or takaful certificates issued on or after 1 January 2022 but no later than 31 December 2025.
 
For the purposes of Exemption Order No. 16, the expression ‘product’ has the meaning assigned to the expression in Exemption Order No. 15.
 
Comment
 
These exemption orders are in line with Budget 2022 tabled by the Minister of Finance in late October 2021 with the goal to ensure that the Rakyat’s well-being is being taken care of.
 
Alert by Sheba Gumis (Partner) of the Corporate Practice and Desmond Liew (Senior Associate) of the Tax Practice of Skrine.

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