Owners of captive insurance companies, faced with increasing compliance obligations, are employing greater resources than ever to achieve full compliance within their insurance operations. Insurance premium tax (IPT) is an area of tax compliance which is administratively complex and requires considerable depth of knowledge in order to avoid the many pitfalls that exist. In many jurisdictions the responsibility for IPT compliance falls onto either the shoulders of captives themselves or their policyholders, usually the captive’s owners. Tax authorities around the world are beginning to focus much more on IPT non-compliance and a fully auditable compliance solution will provide a rock-solid defence against any tax inspections. Penalties for non-compliance can often be punitive and reputational damage in these times of increased corporate scrutiny can cause even greater long-term damage to a company’s brand or its share price. IPT rates are also on the rise, with rates rising to over 20% in some countries. Consequently, tax charges and any penalties can become a material element to your total insurance cost. FiscalReps has developed a five-point health check which allows captive owners to take control of their IPT costs and compliance, reassuring them that their premium tax costs remain accurate and that their tax responsibilities are always correctly discharged.
The investment in establishing the true global IPT cost to your business and the development of an effective ongoing tax compliance solution could save your organisation both money and time by: • Ensuring that tax calculations are always accurate • Avoiding the financial consequences of non-compliance • Introducing a robust tax compliance system into the annual renewal process • Outsourcing non-core processes to release valuable internal resources • Managing the demands of tax authorities efficiently
FiscalReps will conduct a thorough review of the insurance programs underwritten by the captive in order to establish the rules and regulations that apply to the contracts of insurance. FiscalReps will provide high-level advice on: • Applicable premium tax regulations • Premium tax allocation methodology • Location of risk assessment • Interaction with local insurance regulations
FiscalReps will continue to work with the captive to ensure that full IPT compliance is achieved going forwards. Using a combination of FiscalReps’ innovative OUTSOURCING, TECHNOLOGY, CONSULTANCY and TRAINING solutions, captives and their owners can access the level of FiscalReps’ expertise they require to ensure that they remain in full control of their ongoing IPT compliance obligations.
Based on the discovery findings, FiscalReps will prepare detailed premium tax calculations of current and prior year insurance policies: • Reconciling FiscalReps’ calculations with captive records • Establishing the existence of any under or overpayments of tax • Establishing the party responsible for tax settlement in each country
point health check
3 regularisation Based on the results of calculation, FiscalReps will work together with the captive to regularise the captive’s tax position in each country under review, ensuring that all legacy tax issues are cleared in full, including negotiating the settlement of any penalties or fines that may be levied by tax authorities.
After regularisation, FiscalReps will develop a tailored IPT compliance process for the captive, ensuring that full IPT compliance continues to be achieved and that the captive remains fully aware of its compliance responsibilities and has the necessary skills to discharge their obligations and to be able to demonstrate this fact to tax authorities.
Why FiscalReps? Since formation in 2003, FiscalReps has been the market leader in the field of international IPT compliance, providing robust compliance solutions for over 200 clients, including many of the world’s largest insurers and captive owners. With qualified professionals in the areas of finance and insurance, and with extensive experience gained both in the London market and internationally, FiscalReps is able to harness technical skills and market experience to deliver a robust but common-sense IPT compliance solution.
FiscalReps offer a suite of products encompassing Outsourcing, Technology, Consulting and Training solutions to assist clients in achieving and maintaining global compliance. Mike Stalley FCA, Chief Executive, founded FiscalReps in 2003 after experiencing at first hand the difficulties involved in achieving international premium tax compliance. To find out how FiscalReps can give you certainty surrounding your organisation’s IPT compliance obligations, please contact us. We can also speak to you in French, German and Spanish.
10 FENCHURCH AVENUE LONDON EC3M 5BN UK T +44 (0)20 7663 5672 | MIKE.STALLEY@FISCALREPS.COM | WWW.FISCALREPS.COM
Owners of captive insurance companies, faced with increasing compliance obligations, are employing greater resources than ever to achieve fu...