TMF Group highlights latest IPT changes

The latest changes to insurance premium tax (IPT) and related fiscal developments affecting global insurance programmes have been highlighted by TMF Group, together with the limited impact of Covid-19 on IPT compliance.

Covid-19
While the Covid-19 pandemic continues to have a major impact around the globe, IPT compliance remains relatively untouched. Governments and tax offices have implemented various responses, though the tax measures being implemented are often in the sphere of corporate and personal income tax, as well as VAT. This is understandable as these would appear to be the taxes that can bring the most immediate and effective relief to struggling taxpayers.

There are a few schemes that apply to IPT but these tend to be fairly limited in scope. One measure the Italian authority has taken has been to delay taxpayer obligations, including delaying the payment and declaration deadlines for most taxes. This includes IPT, but these concessions are drawn up specifying that they are only applicable to Italy domiciled or resident taxpayers.

The Dutch authority has included IPT within a payment deferral scheme, thereby allowing IPT payers to apply for the deferral of IPT payments by three months, though the declarations must still be made.

Portugal: implementation of changes to stamp duty reporting delayed
On 24 March, the Portuguese authorities published Order No 121/2020-XXII, which provides an update on the implementation of the new system of reporting stamp duty in Portugal. In light of the impact Covid-19 is having on the resource of the tax office and taxpayers, and due to the fact the systems required to declare the new return format are not yet ready, the authorities have postponed the implementation of the new system until January 2021. The authorities will revert to the old system of declaration for the rest of 2020, with January, February and March declarations due by 20 April 2020.

The first declaration under the new system is now scheduled to be submitted by 20 February 2021, reporting transactions taking place during January 2021.

Germany: change to insurance tax on drought insurance
On 19 March, changes to the German Insurance Tax Act were published in the Federal Law Gazette. The changes have brought the treatment of drought insurance in line with many other types of agricultural insurance by changing the tax rate from 19% of the premium to 0.03% of the sum insured.

Drought has been considered an underinsured risk in the agricultural sector and this change is intended to reduce the cost of premiums. The changes have retrospective effect from 1 January 2020.

Manitoba, Canada: proposed reduction in PST
The 2020-2021 provincial budget proposes to reduce provincial sales tax (PST) from 7% to 6%, with effect from 1 July 2020. PST in Manitoba applies to most insurance with some specific exemptions for marine, aviation and transport, as well as certain life and health insurance.

Austria: annual IPT and FBC reports due
Insurers registered in Austria are reminded that the 2019 annual IPT and FBC returns are due by 30 April. The returns should report the monthly liabilities arising throughout 2019, payments of which should have been made on a monthly basis within 45 days of the month in which the related premiums were received. Nil annual submissions are compulsory.

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