Insurance premium tax rate changes from TMF Group

TMF Group has announced the latest rate changes to insurance premium tax (IPT) and other insurance levies around the world, as well as upcoming insurance tax deadlines.

Hungary – extension of the additional IPT

The additional IPT, which applies in addition to the existing IPT regime to both life and non-life insurance premiums, was extended through 31 December 2024, according to Government Decree No. 206/2023, which was published in the Hungarian National Gazette on 1 June 2023. The decree is effective from 2 June 2023. The applicable rates for the extended year will be the same as those for 2023, ranging from 2% to 12% for most non-life insurance classes, and from 1% to 5% for life insurance.

Latvia – Financial Commission levy rate decrease

The Latvian Financial and Capital Market Commission has announced changes to the rate of the levy paid to the Commission. Effective from 1 January 2023, compulsory motor third-party liability policies and life insurance with provisioning operations, including market-linked life insurance policies are subject to a rate of 0.130% of gross premium collected, reduced from the previous 0.143%. All other insurance policies are charged with a levy of 0.184%, down from 0.202% last year.

The Financial Commission Levy is due by resident insurers and foreign insurers with a Latvian branch. EEA insurers carrying out business on a freedom of services basis are not subject to the levy.

Norway – Norwegian Natural Perils Pool contribution increase

Circular no. 5/2023, dated 23 June 2023, has set the rate for the 2024 Norwegian Natural Perils Pool contribution. The rate for 2024 will increase from 0.0065% to 0.007% with effect from 1 January 2024.

Bermuda – stamp duty increase

The Stamp Duties Act 1976 has been amended by the Stamp Duties Amendment Act 2023:11 and has amended the rates of stamp duty with effect from 1 April 2023. Stamp duty on the majority of insurance policies has now increased from 1.00% to 1.05%.

Sierra Leone – Goods and Services Tax removal of the insurance services exemption

The Parliament of the Republic of Sierra Leone signed into law on 24 April 2023 the Finance Act 2023. According to the legislation, insurance is subject to 15% GST, except life insurance and reinsurance services for life insurance. The Act is effective from 1 April 2023.

Romania – Policyholders Protection Levy rate updated and new contribution implemented

The rate of the Policyholders Protection Levy, due by resident insurers and local branches of EEA insurers, has decreased from 4% to 2% from 16 June 2023. The rate should revert back to 4% on 1 January 2024. For life insurance business, the contribution rate does not change and remains at the level of 0.4%.

In addition, pursuant Law no.112/08 May 2023, a new contribution, also levied on resident insurers and local branches of EEA insurers, has been implemented. The Policyholders Protection Fund Special Contribution is introduced at the rate of 5% from 16 June 2023 and then should decrease to 3% from 1 January 2024.

Upcoming Deadlines

Italy – Road Accident Victims Fund

Insurance companies writing motor third-party liability and/or compulsory pleasure boat liability insurance in Italy are reminded of the upcoming deadline for the final Road Accident Victims Fund (RAVF) payment. This payment is an adjustment to the provisional payment made in January and is due by 30 September 2023. The final RAVF payment is calculated as 2.5% of the calculation base, which in case of the final payment is formed of a specific percentage of premium from the previous calendar year.

The final RAVF amount should equal the difference between the specific percentage of the previous year’s premiums and the provisional payment. If the provisional RAVF payment is higher than the total amount of RAVF contribution calculated for the year, insurance companies can request a refund from the Consap.

Norway – Norwegian Natural Perils Pool

Insurers registered as members of the Norwegian Natural Perils Pool (NNPP) are reminded that the deadline for the reporting of the settlement basis is 28 August 2023. The declarations should include the total sum insured against fire as per 1 July 2023. There is no payment due at this stage; the NNPP will use the total sum insured against fire as of 1 July to determine the distribution formula, reflecting each member’s share of the pool, and issue quarterly settlement at a later stage. The pool costs are distributed between members according to the distribution formula, in proportion to their share of the pool.