If you run a business, you may be required to produce credit facilities or guarantor-ship from time to time. This can often be fulfilled by purchasing a bond from an insurance company by paying a premium.
In Singapore, the most common bonds are
If you run an employment agency, you are required to submit Employment Agency Bond (Banker’s Guarantee) to Ministry of Manpower.
Do you know that you have been overpaying the insurance by 7% because you were paying GST on the bond premium?
GST Exemption for Insurance Bonds
Based on the latest clarification from IRAS, Goods and Services Tax (GST) should be exempted on insurance premiums for unconditional bonds. Below is the types of bonds that qualify for GST exemption:
- Advertising Bonds
- AVA Bond for Dog Licence
- Custom Bonds
- IATA Bonds
- ICA Crew Bonds
- Levy Bond
- Performance Bonds (applicable only to unconditional wording)
- PSA Bonds
- Rental Bonds (Applicable only to unconditional wording)
- Security Bond for Work Pass Holder (Foreign Worker’s Bond)
- Tax (Excise) Bonds
If you were paying GST for these bonds, it is time to re-evaluate your insurance program.
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