Latest IPT rate changes globally from TMF Group

A number of insurance premium tax (IPT) rate changes, together with other tax changes impacting global insurance programmes, have been made recently, according to TMF Group.

Denmark – Guarantee Fund for Non-life Insurance 2023

The Danish Financial Supervisory Authority announced on 31 October 2022 that the Guarantee Fund for Non-life Insurance will continue collecting the contribution of DKK40 per policy in 2023, due on certain consumer policies. The authority also announced that the contribution of DKK30 per policy will continue to apply per insured under occupational injury insurance contracts.

France – Increase to the National Agricultural Catastrophe Fund rate

With effect from 1 January 2023, the National Agricultural Catastrophe Fund rate increases from 5.5% to 11%. The change has been introduced by the 2023 Budget Law. The National Agricultural Catastrophe Fund normally applies to insurance premiums exclusively or principally covering damage to buildings and machinery allocated to agricultural premises and motor risks (damage and compulsory motor third party liability) related to utility vehicles used in agricultural premises.

Hungary – Increase in the higher rate of additional IPT

Government decree no. 582/2022, published on 24 December 2022, increased the higher tier tax rates of the Hungarian additional IPT. The tax rates for premiums collected by an insurer in 2023 that exceed HUF36bn have increased as follows:

• Non-life insurance policies increased from 7% to 12%;
• Life insurance policies increased from 3% to 5%;
• The additional IPT is a temporary tax that will apply for the period 1 July 2022 to 31 December 2023. It applies in addition to the existing IPT regime and will also apply to life insurance premiums.

Ireland – Health Insurance Levy contributions for 2023

The Health Insurance (Amendment) Act 2022 amended section 125A of the SDCA (Stamp Duties Consolidation Act 1999) to provide for a revised levy on health insurers.

From 1 April 2023, the contributions due on relevant health insurance policies will be changed to the new values outlined below:

• €36 for an insured under 18 years of age who is insured under a relevant contract that provides non-advanced coverage;
• €146 for an insured under 18 years of age who is insured under a relevant contract that provides advanced coverage;
• €109 for an insured aged 18 years and over who is insured under a relevant contract that provides non-advanced coverage;
• €438 for an insured aged 18 years and over who is insured under a relevant contract that provides advanced coverage.

Lithuania – Supervisory Authority Levy rate for 2023

The rate for the 2023 Supervisory Levy contribution has been established in accordance with Item Nos. 8 and 9 scheduled on Resolution about the amounts of the Supervised Financial Market Participants’ Contribution in 2023 dated 21 October 2022. The rate will remain at 0.221% of written premiums in 2023. Additionally, the rate which applies to premiums related to policies written by Lithuanian branch of EU or EEA insurers remains at 0.111% of written premiums.

Norway – Road Traffic Insurance Tax rates for 2023

The Road Traffic Insurance Tax daily rates for 2023 will be as follows:

• Vehicles under 7500 kg, diesel without factory-fitted particulate filter NOK9.84;
• Vehicles under 7500 kg, diesel with particle filter NOK8.38;
• Motorcycles NOK6.10;
• Vintage vehicles, mopeds, tractors, taxis, snowmobile and others NOK1.42;
• Electric vehicles NOK8.38.

The new rates apply to insurance contract signed or that have the main due date and are received on or after 1 March 2023.

Poland – Insurance Ombudsman Charge increased

With effect from 1 January 2023, resident insurers are subject to an Insurance Ombudsman Charge rate of 0.02875% (increased from the previous rate of 0.0184%). Insurers based in the EEA writing policies into Poland based on the Freedom of Services rule are subject to an Insurance Ombudsman Charge rate of 0.03125% (increased from the rate of 0.02%).

The change has been introduced by the Act of 1 December 2022 amending the act on handling complaints by financial market entities and on the Financial Ombudsman and certain other acts. In addition, the calculation basis has been updated; the Insurance Ombudsman Charge is now calculated on “the amount of the gross written premium collected in the year preceding by two years the year for which the fee is due”.

Romania – Policyholders Protection Levy increased to 4%

The Policyholders Protection Levy has been increased to 4% from 2.5% with effect from 1 January 2023. The change was implemented in The Official Gazette of Romania no. 1257 of 2022-12-28, Norm no. 31/2022 for completing the Norm of the Financial Supervision Authority no. 17/2015 on the contribution quotas due by insurers to the Insured Guarantee Fund. For life insurance the rate remains at 0.4%.

Senegal – Increase of IPT rates

With effect from 1 January 2023, several IPT rates increase as follows:

• Insurance covering all risks of air, sea and river transportation is now subject to 6% IPT;
• Insurance covering multi-risks home insurance, fire insurance for buildings used exclusively for residential purposes is now subject to 8% IPT;
• Group insurance is now subject to 5% IPT;
• Life annuity insurance is now subject to 7% IPT;
• Insurance covering all other risks is now subject to 14% IPT;
• Export credit remains subject to 0.25% IPT.

These IPT increases have been introduced by the 2023 Budget Law, which also introduced some changes in the insurance levy. The rate of the levy remains at 1% on non-life insurance; however, life insurance is now subject to a reduced rate of 0.5% and reinsurance is no longer subject to the levy.

Sri Lanka – Implementation of Social Security Contribution Levy at 2.5%

A new tax has been introduced in Sri Lanka by the Social Security Contribution Levy Act, No. 25 of 2022. With effect from 1 of October 2022, importers, manufacturers, service providers, wholesalers, and retailers with a yearly turnover of more than LKR120m are subject to a 2.5% Social Security Contribution Levy (SSCL) on their gross sales. All types of insurance, with the exception of life insurance, should be subject to this new levy.

Suriname – Implementation of VAT at 10%

The Surinamese parliament passed legislation to remove the turnover tax and introduce a new value added tax system. Effective 1 January 2023, the 12% turnover tax is no longer applicable and is replaced by VAT at 10%.