TMF Group highlights global insurance premium tax changes
TMF Group has produced its latest IPT Updates and Alerts report highlighting the latest changes in insurance premium tax (IPT), VAT and stamp duty rates, and upcoming deadlines.
The key points are:
Finland – road safety tax
The road safety tax due on premiums covering motor third-party liability will increase from 1% to 1.3% with effect from 1 January 2023. The increase was introduced by Law 26.08.2022/793.
Hungary – additional IPT
Further to the introduction of additional temporary IPT, as of 18 July 2022, the Hungarian legislation has been amended and rates for the first advance tax payment have been revised. As per Section III § 8 of the Hungarian Journal No 118, the applicable tax rates have been halved. This change concerns only the calculation of the first advance tax payment; the rates applicable to the calculation of the second advance tax payment remain unchanged.
Botswana – VAT
The standard VAT rate has been temporarily decreased from 14% to 12%. The reduction applies for a period of six months beginning 3 August 2022 and ending 2 February 2023. The change was implemented in the Value Added Tax (Amendment) Bill 2022 published in the Extraordinary Gazette (no Vol LX, No 93) on 1 August 2022.
Uganda – stamp duty
The Stamp Duty (Amendment) Bill 2022, Item 48 of the Second Schedule to the Act, has been amended to remove stamp duty that was formerly imposed on agricultural insurance policies. The change was implemented with effect from 1 July 2022.
Sri Lanka – VAT
The rate of Sri Lankan VAT has been increased from 12% to 15% with effect from 1 September 2022. The change was published in the Gazette of the Democratic Socialist Republic of Sri Lanka, on 31 August 2022.
Upcoming deadlines:
Hungary – additional IPT
The first advance tax payment is due by 30 November 2022 and is calculated based on the insurance premium income generated between 1 July 2021 and 30 June 2022. The updated rates range now from 2% to 7% for most non-life insurance classes, and from 1% to 3% for life insurance.
Italy – 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 and is calculated as a prescribed percentage of the previous year’s IPT and anti-racket liabilities (excluding IPT paid on motor third-party liability insurance). The rate for the 2023 prepayment calculation is 100% of the previous year’s taxes.
The 2023 prepayment can be offset against the IPT liabilities (excluding IPT on motor third-party liability) starting from February 2023 – in other words it can be offset against the January 2023 IPT liabilities and onwards. Prepayment cannot be used against anti-racket liabilities, even though anti-racket forms part of the basis of calculation of the prepayment.
