Insurance premium tax changes – TMF Group
TMF Group, a global provider of tax and accountancy services, has highlighted a number of insurance premium tax (IPT) and related tax changes around the world related to global insurance programmes.
Kenya – Withholding tax of 5% on cross-border reinsurance
The Finance Act 2019 has introduced a withholding tax of 5% on reinsurance transactions, where a premium is paid from Kenya to a non-resident reinsurer that is not deemed to have a permanent establishment in Kenya. An exemption applies to the reinsurance of aircraft.
The withholding tax of 5% is already charged on the insurance premium paid to non-resident insurers, specified in the Income Tax Act. The Finance Act 2019 clarifies that the term “insurance premium” should include reinsurance premium, with effect from 7 November 2019.
Finland – IPT exemption extended to livestock insurance
The Finnish parliament has approved changes to the Finnish IPT Act, which has introduced an IPT exemption applicable to livestock insurance, provided the insurance meets certain conditions. This exemption applies from 1 November 2019 to 31 December 2027.
Denmark – Guarantee fund for non-life insurance rate remains unchanged for 2020
As per its notice dated 24 October 2019, the Danish Financial Supervisory Authority has instructed the guarantee fund to continue collecting contribution of DKK40 per policy in 2020 from its members, to achieve the guarantee fund’s capital of DKK300m.
Angola – 14% VAT implementation and stamp duty exemption
From 1 October 2019 onwards, value-added tax (VAT) was introduced in Angola. Law No 7/19 of 24 April 2019 has approved the VAT Code. It introduces a 14% VAT rate on insurance, alongside the introduction of a stamp duty exemption for insurance contracts. These changes also affect the basis of calculation for the supervisory fee, which is no longer calculated on stamp duty.
Kosovo – 5% IPT removed
The 5% tax on the gross premium of insurance companies licensed in Kosovo was removed on 3 August 2019, according to Law No 6 of 19 July 2019 on corporate income tax. This law has replaced the previous law, whereby 5% premium tax had been defined as an extra tax on insurance activities.
