- Service Tax Policy No. 1/2025 (Amendment No. 5) introduces a service tax exemption for fees or commissions on the operation of a TIA-i, effective from 1 June 2026.
- The exemption applies only if the TIA-i provider is registered under the Service Tax Act 2018, the account complies with Shariah principles, and it functions like a CASA account for daily transactions with no lock-in period.
- Covered services include cash deposits/withdrawals, payments/transfers, debit card issuance, basic counter and ATM transactions, and account statement printing.
- No refunds are allowed for service tax paid from 1 July 2025 to 31 May 2026; refunds from 1 June 2026 onward must follow RMCD procedures.
- Deloitte notes the change should lower costs for users and improve tax neutrality between Islamic and conventional banking.
Source: taxathand.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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