Goods and Services Tax (GST) Frequently Asked Questions (FAQs) Version 1

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1 Index A. General & Operational I. General & Operational Questions B. United Overseas Bank (Malaysia) Bhd [UOBM] Products II. Credit/Debit Card III. Deposits IV. Safe Deposit Box V. Housing Loans, Fixed Loans & Overdraft VI. Investment, Treasury & Custodian Services VII. Wholesale Banking VIII. Trade Financing & Services IX. Bancassurance General & Life Insurance I. General & Operational 1) What is GST? Goods and Services Tax (GST) is a consumption tax levied on all taxable supply of goods and services made in Malaysia by a taxable person. It replaces the current Sales Tax and Service Tax (SST). 2) How does GST work? Consumers in Malaysia will pay GST on his/her purchase of taxable goods or services, made or performed in Malaysia. GST is charged on the value of goods or service by a GST registered supplier. The GST amount charged and collected are payable to Royal Malaysian Customs Department (RMCD). 3) What is the GST rate? The GST rate for standard rated supplies is at 6%. 4) When will GST be effective? GST is effective from 1 April 2015 onwards. 5) Are financial services subject to 6% GST? Yes. Fees, Commission and Charges for certain financial services will be subject to GST at standard rate of 6%. 6) Will UOB revise their Fees, Commission and Charges for reasons other than to include GST on those rates? No. We will only collect GST on Fees, Commission and Charges that are subject to the standard rate of 6%. 7) What are the types of Fees, Commission and Charges subject to 6% GST? Where can I view a list of these Fees, Commission and Charges? In general, Fees, Commission and Charges on all commercial banking services will be subject to GST at standard rate of 6%. 1 P a g e

2 Examples include (but not limited to) the following: o Account operation charges o Trade services o Cash services o Securities services o Money transfer services o Electronic banking Please refer to the relevant section in this FAQs for more information. Our updated list of Fees, Commission and Charges with GST will be made available from our branches and/or via our website in March ) Will a Tax Invoice be issued to all customers? UOBM will provide a monthly Tax Statement instead of individual tax invoices. o Businesses and Companies You will receive the Tax Statement by mail. o Personal and Joint Account Holders Tax Statement will only be made available upon request for individual customers who will not be able to claim input tax (unless they are GSTregistered and carrying out a business). 9) When will I get my Tax Statement from the Bank? Tax Statement is issued on a monthly basis. The Tax Statement is a separate statement from the normal account statement. II. Credit/Debit Card 1) What are the credit card Fees, Commission and Charges that are subject to GST? All Fees, Commission and Charges imposed on your credit card are subject to GST at standard rate of 6%. o Fees, Commission and Charges that are subject to 6% GST Annual fee, cash advance withdrawal fee, statement request fee, card replacement fee and sales draft request fee and others. o Fees, Commission and Charges that are not subject to GST Late payment charges and finance charges. 2) Effective 1 April 2015, do I still need to pay RM50 service tax? No. Effective 1 April 2015, Service Tax Act 1975 will be repealed, therefore the RM50 service tax will no longer be applicable. Your annual fees will be subject to GST at standard rate of 6%. 3) Are retail purchases made overseas or locally using credit/debit card subject to 6% GST? Payment made using credit/debit card will not be subject to GST. Payment made using credit/debit card will record actual amount paid for the purchase. 2 P a g e

3 III. Deposits 1) Is interest paid to or received from UOBM subject to 6% GST? No. Interest paid to or received from the Bank are not subject to GST. 2) I am a non-malaysian customer of UOBM. Are the charges relating to my Savings/Current account subject to GST? Yes. Fees, Commission and Charges for services rendered in relation to Malaysian deposit accounts are subject to GST at standard rate of 6%. IV. Safe Deposit Box 1) What is the GST treatment on safe-keeping services? Rental of a safe deposit box is subject to GST at standard rate of 6%. Penalty for late payment on the safe deposit box rental is not subject to GST. V. Housing Loans, Fixed Loans & Overdraft 1) I have a loan with UOBM. What areas of my loan/overdraft that are subject to 6% GST? Monthly instalments charged by the Bank are not subject to GST. Interest charged by the Bank is not subject to GST. Late payment and interest on late payment charged by the Bank is not subject to GST. Fees, Commission and Charges such as processing fee, service charge and administration fee will be subject to GST at standard rate of 6%. 2) I am a non-malaysian customer of UOBM, and I took a loan from the Bank to finance a commercial property in Malaysia. Are the Fees, Commission and Charges on my loan account subject to GST? Yes, GST will be levied on Fees, Commission and Charges at standard rate of 6%. 3) I am applying a loan from UOBM. Is the MRTA/Fire Insurance subject to GST? MRTA is an exempt supply and is not subject to GST. However, Fire Insurance and Houseowner Insurance will be subject to GST at standard rate of 6%. 3 P a g e

4 VI. Investment, Treasury and Custodian Services 1) Is my investment in Unit Trust subject to GST? Income distribution from your Unit Trust is not subject to GST. Fees, Commission and Charges are subject to GST at standard rate of 6%. 2) Is my investment in Treasury Products (including but not limited to Money Market Deposit; Physical Gold; Premier Gold Account(PGA)/Gold Savings Account(GSA); Fixed Income; Structure Products; Derivatives; Foreign Exchange, Banker Acceptance and Negotiable Instrument Of Deposit) subject to GST? No. GST will not be levied on interest earned, dividends or distribution of income. However, any Fees, Commission & Charges imposed, will be subject to GST at standard rate of 6%. For example, any Fees, Commission & Charges imposed when the balance falls below the minimum requirement for PGA/GSA is subject to 6% GST. 3) Is conversion of Premier Gold Account/Gold Savings Account to physical gold subject to GST? Yes, the conversion fee is subject to GST at standard rate of 6%. 4) Are nominees and custodian services provided by the Bank subject to GST? Yes, at standard rate of 6%. 5) Are Foreign Exchange transactions subject to GST? No. However any Fees, Commission & Charges imposed by the bank will be subject to GST at standard rate of 6%. VII. Wholesale Banking 1) What are the Factoring product charges which are subject to GST and how is it charged? Will there be a GST statement? All Fees and Charges under Factoring product will be subject to GST at standard rate of 6%. GST will be charged for every single transaction. 4 P a g e

5 VIII. Trade Financing & Services 1) What are the trade financing and services that are subjected to GST and how is it charged? All charges in relation to trade financing and services (fee and commission based) are subject to GST at standard rate of 6%. These charges (inclusive of GST) will be debited from your account. 2) What are the trade products and services that are not subject to 6% GST? All spread based/interest based charges in relation to trade financing are exempted and not subject to GST. All trade financing and service charges in relation to exported goods or goods located outside Malaysia are zero-rated and are not subject to GST. 3) Does the Bank charge GST for every trade transaction or service rendered? All trade financing and service charges that are subject to GST will be charged on a transactional basis. IX. Bancassurance General & Life Insurance 1) Is GST chargeable on policies where Service Tax has been paid for in advance for period of cover that extends after 1 April 2015 and beyond? No. GST will be chargeable on all general insurance policies at the next renewal date at standard rate of 6%. 2) Are general insurance policies subject to GST? Yes, at standard rate of 6%. 3) How is GST calculated on a general insurance policy? 6% GST will be calculated on the value of the premium (less any rebates or no claims discount). 4) Are life insurance policies subject to GST? Life insurance policies are exempt from GST. However, any non-life insurance benefit(s) attached to life insurance policies may be subject to GST at standard rate of 6%. 5) What type of non-life insurance benefit(s) will be subject to 6% GST? The benefits subject to GST at standard rate of 6% include but are not limited to: o Personal Accident; o Total and Permanent Disability*; and o Medical and Health; o Other benefits o Critical Illness*; 5 P a g e *Subject to confirmation from RMCD.

6 Important Notice & Disclaimer The above information is accurate as at 25 February 2015 and may be subject to any change at any time without notice, if outdated or no longer applicable. The above information is provided for general information only and shall not be relied upon by any party for any purpose. The above does not constitute professional advice on GST and if you require professional advice, please consult a qualified GST consultant or lawyer. While every reasonable care has been taken to ensure the accuracy of the above information, UOBM makes no representation and warranty, whether expressed or implied, and accepts no responsibility for its completeness or accuracy. To the fullest extent permitted by law, UOBM shall in no event be liable for any loss or damage (whether direct or indirect, special, incidental or consequential) however arising from or in connection with any person s reliance on the above information end P a g e