Future uncertain for Greece’s TEA EAPAE

The TEA EAPAE (Occupational Insurance Fund of Insurers and Personnel of Insurers Companies) grants additional pension to all employees. The insured is not subject to this tax which is paid directly by insurers. It was proposed in October that TEA EAPAE would be abolished before the end of 2014. However, according to FiscalReps, the TEAA PAE (Fund) has officially asked The Hellenic Council of State, the Supreme Administrative Court, to revoke the 2014 Legislation that abolished the 1.0% & 2.0% contribution relevant to domestic and Freedom of Services (FoS) insurers. In the meantime, the Fund has announced a set of new rules that all insurers should make a temporary contribution until the matter is resolved with the Hellenic Council of State. The rules include how the contribution is calculated, filed and paid. FiscalReps explained: "It is envisaged that the new rules shall provide for a temporary contribution to be introduced with effect from January 1 2015, until the Hellenic Council of State reaches a decision. If the Council agrees to the Fund's request then the temporary Contribution will be superseded by a permanent Contribution. Speculation suggests this will be July 2015."hideFiscalReps said that it contacted the Greek Pension Fund to obtain official clarification of the new rules in respect of the reintroduction of the Greek TEA EAPAE Contribution. Unfortunately, the Fund was not prepared to confirm FiscalReps' understanding in writing - but the Fund's Director did give the company a verbal confirmation. It was stated that, for the moment, there is no legal ground for the contribution to be temporarily introduced. However, it is believed that the Hellenic Council of State will decide in favour of the Fund's request, i.e. the abolishment of the contribution to be revoked, and that it will be prudent for insurers to be compliant with the Fund's proposal, said FiscalReps. It added that there is a strong political argument in Greece that the Council will approve the new rules and that a permanent contribution will be incorporated into a legislative decree. A significant amount of pensions are paid by the Fund to employees of insurance companies and the new Government has assured the Fund that there will be no pension cuts. FiscalReps explained that both domestic and freedom of service insurers are liable to pay the temporary contribution if they provided insurance cover in 2014. As such, insurers must pay 20% of the TEA Contribution in 2015 that was declared and paid in the corresponding month of 2014 until the matter is resolved with the Hellenic Council of State. Interestingly, the new rules take effect from January 1, 2015 even though the official announcement was only made March 9, 2015. The Fund could not confirm to FiscalReps whether interest or penalty charges would apply to insurers that did not pay the temporary contribution, although this point is expected to be confirmed in the Hellenic Council of State's decision. However, the Fund did point out to FiscalReps that there is a high possibility that interest or penalties will be charged in retrospect if insurers did not comply with the Fund's request. Highlighting the ever-present problem of certainty when it comes to global programme tax issues, FiscalReps said it "appreciates that our clients require certainty as to whether they should pay Insurance Premium Tax (IPT) in EU/EEA member states and/or globally and, as a dedicated IPT service provider, we consider it our role to do this. However, there will be situations, such as this, where we do not have certainty and our role then becomes one of providing our clients with the available information in the market place that allows you to make the best IPT compliance decisions based on the perceived risk involved." For further information, contact Petros Pachis at FiscalReps: petros.pachis@fiscalreps.com.

Future uncertain for Greece’s TEA EAPAE

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