In many countries, insurers writing insurance coverage outside their country of establishment need to comply with tax legislation in the country where the risk is located. Insurance Premium Tax (IPT) is constantly changing and provides challenges such as varying taxes, different rates and confusing deadlines. Recent IPT changes around the world include:

• Belgium: With effect from 1 January 2018, the National Institute for Health Disability (INAMI) contribution charged to the policyholder for compulsory insurance policies covering accidents at work has been reduced from 3.75% to 3.49%. The insurance company's contribution of 0.06% remains unchanged. The reduction applies to the premiums collected after 1 January 2018 for risks covered after 31 December 2017. If the premium covers an insurance period before and after 1 January 2018 the different rates must be applied pro rata according to the duration of the periods before and after this date.
• Hong Kong: With effect from 1 January 2018, a new tax called the Levy on Insurance Premium will be introduced on most non-life and long-term insurance policies which is charged to the policyholder by insurers. Reinsurance, marine, aviation, goods in transit and any insurance policies underwritten by authorized captive insurers are exempted from the levy. The levy rate starts at 0.04% and will reach 0.1% from 1 April 2021. A levy cap applies on a per policy basis for both non-life insurance and long-term insurance taken out in a calendar year.
• Italy: With effect from 1 January 2018, the road accident victims' fund levy reduces to 2.39975% (from 2.4085%)
• New Zealand: With effect from 1 November 2017, the Earthquake Commission Levy rates for fire risk for personal and residential properties will increase to 0.20% (NZ$0.20 per NZ$100). The levy is paid by the insurer unless the insurer does not carry on business in New Zealand in which case the insured person is jointly and severally liable for the levy with the insurer.
• Australia: With effect from 1 July 2017, Victoria has introduced additional exemptions from insurance duty on insurance for crops which are being grown harvested or stored; livestock and agricultural machinery.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London

• David Bearman
  dbearman@uk.ey.com
• Tom Hilverkus
  thilverkus@uk.ey.com
• Russell Brown
  rbrown8@uk.ey.com

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ATTACHMENT

PDF version of this Tax Alert