An insurance policy is subject to the stamp duty obligation.

According to Article 2 (1) of Law No. 13 of 1985 on Stamp Duties, an agreement or other letters that are composed to provide evidence of an act, fact, or condition that has civil characteristics are subject to the stamp duty.

Insurance is defined as an agreement between two or more parties, in which the insurer provides a guarantee of compensation to the insured for financial losses, damage or loss of potential profits, or legal liability to third parties, due to an uncertain event, or grants payment based on the death or life of the individual insured, in return for an insurance premium (Article 1 (1) of Law No. 2 of 1992 on the Insurance Industry).

An insurance policy has civil characteristics and provides evidence of the insurer’s committment to provide compensation to the insured. Thus, an insurance policy is an “agreement” as defined by Article 2 (1) of Law No. 13 of 1985 on Stamp Duties and is subject to the stamp duty.
 

Josephine Hadiwijaya