A new exemption has been added to Malaysia's service tax rules for private healthcare services, and it directly affects how private hospitals and clinics handle billing for newborn patients. Under Service Tax Policy No. 5/2025 (Amendment No. 4), private healthcare facilities are no longer required to impose service tax on newborns who have not yet obtained citizenship status.

Before this exemption can be applied, two conditions must be met. One of the newborn's parents must be a Malaysian citizen, with valid identification documents issued by the National Registration Department. This documentation proof must then be submitted to the private healthcare facility during the newborn's registration process.

This places the responsibility on the facility's front desk and admin team to collect and verify this proof at the point of registration, before the exemption is applied to the bill. Without this documentation on file, there is no basis to leave out the service tax, and the facility would be expected to charge it as usual.

This addition was introduced as a new paragraph under the policy, with the change taking effect from 1 July 2025. It sits alongside other exemptions already in place for consultation fees, health screening for non-citizen workers, and foreign diplomats, all of which private healthcare facilities are expected to apply correctly and consistently.

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