IPT rate changes and deadlines 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. Rate changes Finland – IPT rate increased to 25.5% The Finnish government has adopted Bill HE 61/2024, increasing the IPT rate from 24% to 25.5%, effective from 1 September 2024. France – CatNat premium to increase in January 2025 The CatNat premium (prime additionnelle catastrophes naturelles) is to increase in 2025 as follows: Insurance covering damages to any type of property: from 12% to 20% of the insurance premium covering damage risks (as well as business interruption for business property) Insurance covering damage to motor vehicles: from 6% to 9% of the insurance premium covering fire and theft risks; from 0.5% to 0.75% of the insurance premium covering damage risks when fire and/or theft are not covered By way of background, the CatNat premium is a compulsory additional premium that must be collected by insurers on insurance contracts covering damage to property and on insurance contracts covering damage to motor vehicles. On this additional premium, two taxes are due: IPT, which is borne by the insured, and Natural Catastrophe Fund levy, which is borne by the insurer. Iceland – introduction of the Lava Barriers Levy A new parafiscal charge, the Lava Barriers Levy, came into force on 1 January 2024 in Iceland. The levy is calculated at the rate of 0.008% of the fire compensation assessment of houses, according to the law on the protection of important infrastructure on the Reykjanes Peninsula. The objective is to collect an additional €6.5m in 2024 to fund the protection of important infrastructure in the Reykjanes Peninsula against earthquakes risks. The Lava Barriers Levy has been introduced as a temporary measure and should end on 31 December 2026. Pakistan – increase to sales tax in Sindh Province The Sindh Revenue Board has increased sales tax on insurance services from 13% to 15%, effective 1 July 2024. This amendment was introduced through provincial Finance Act, 2024. Sales tax is normally due on most insurance premiums and the rate is set at provincial level. US/Iowa – surplus lines tax decrease The rate of the Iowa surplus lines tax is due to reduce from 1% to 0.9% by 2027. The change is being implemented gradually as follows: From 1 January 2024 till 31 December 2024: 0.975% From 1 January 2025 till 31 December 2025: 0.95% From 1 January 2026 till 31 December 2026: 0.925% From 1 January 2027 till 31 December 2027: 0.9% The changes have been proposed by the Iowa Senate File 552. Upcoming Deadlines Italy – annual prepayment Domestic and foreign insurance companies operating in Italy are reminded of the upcoming deadline for the annual advance payment. The prepayment is due on 16 November each year and is calculated as a prescribed percentage of the insurer’s previous year’s reported IPT and anti-racket liabilities (excluding IPT paid on motor third party liability insurance). The rate for the 2024 prepayment calculation is 100% of the previous year’s taxes. The 2024 prepayment can be offset against the IPT liabilities (excluding IPT on motor third party liability) starting from February 2025. Prepayment cannot be used against anti-racket liabilities, even though anti-racket forms part of the basis of calculation of the prepayment. Belgium – annual IPT prepayment Insurers registered in Belgium are reminded that the annual IPT prepayment for the period of December 2024 is due to the Belgian tax authorities on 16 December 2024. The prepayment amount is calculated based on the submitted October IPT return, for premiums that incur rates of 9.25% and 1.40% only. The premiums that fall under the rates of 4.4%, 2%, and 1.1% should not be included in the prepayment calculation. The 2024 prepayment can be offset against the IPT liabilities until February 2025. If the prepayment amount is not fully utilised by then, an application for refund shall be submitted by the end of the calendar year in which the prepayment should have been used.

IPT rate changes and deadlines from TMF Group

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