FiscalReps Newsletter February 2013 5th edition
What’s new – Premium Taxes Hungary – important further change to the new IPT regime New legislation has recently been implemented which alters the calculation of the new IPT for February 2013 and subsequent accounting periods, and therefore adds further complexity for insurers trying to get to grips with the tax. Helpfully the tax authority has now published the monthly tax return form and guidelines covering the calculation of the tax and completion of the on-line return. As a result of the latest changes the calculation of tax for January 2013 must be performed on an estimated basis whereas the tax for February 2013 onwards is based on actual premiums in accordance with the new rules. a) January 2013 If the 2013 estimated tax base does not reach HUF 8 billion, the rates of the tax (25% and 50% of the respective full tax rates) for January 2013 only will be applied to 1/12th of the annual estimate. The rates are then applied to the portions (1) up to HUF 1 billion and (2) above HUF 1 billion but below HUF 8 billion.
The tax for January 2013 only will need to be adjusted after the end of 2013 if the band changes once the actual tax base (2013 premiums) is known.
Like the existing contribution to the National Guarantee Fund, the new charge will be administered by the Fonds de Garantie des Assurances Obligatoires de dommages (FGAO).
b) February 2013 onwards
See our alert of 11 January for further details.
With effect from February 2013 the reduced tax rates are applied to the actual monthly tax base unless the actual tax base for the preceding year is over HUF 8 billion (when the full rates apply to all premiums received in 2013). If the actual tax base for 2012 was below HUF 8 billion the tax rates are applied to three slices of taxable premium income:
Ireland - new insurance levy
A Government Decision on 18 December 2012 approved the imposition of a levy on the quarrying and insurance sectors to finance a fund for the compensation of home owners whose dwellings suffer damage from “pyritic heave” (damage to a building caused by the presence (1) up to HUF 100 million, of pyrite in the construction materials), (2) over HUF 100 million but not and where there is no other available exceeding HUF 700 million, means of redress. and (3) and over HUF 700 million at Legislation is required to underpin the full tax rate. the imposition of such a levy and the Minister for Environment, Community This calculation then repeats for each and Local Government, Mr. Phil subsequent month of 2013. Hogan, T.D., has committed to bring this legislation forward as early as France - new parafiscal tax on possible this year. Motor liability premiums We will publish further information on With effect from 1 July 2013 France this levy as soon as details become will introduce an additional parafiscal available. charge on motor third party liability premiums, at the initial rate of 0.8%.
Italy - reporting requirements It is nearly time again for Insurance companies writing insurance in Italy to report on their record keeping to the Italian Tax Authority for the prior calendar year. The deadline for this is 30 April 2013. The report shall include: •
• • •
Contracts (Policy) reporting (excluding General Liability) in respect of new, amended and terminated insurance contracts (policies) Claims reporting Reports on individuals subscribing to life or accident insurance contracts Motor Liability reporting if applicable
These declarations must be submitted electronically, and FiscalReps can assist if clients do not already have mechanisms in place to make these reports. Clients must submit full return data to FiscalReps by 22 March 2013 for onward submission. Penalties from the Italian Tax Authority range between €210 and €5000 per each late return. If guidance is required on completing the returns please contact us. Additional fees and local disbursements borne by FiscalReps are chargeable. The above is in addition to the IPT Book which FiscalReps maintains on behalf of each of its clients operating in Italy based on client data provided. The IPT Book must be maintained in chronological order of premium cashed, including Insured details, Policy details, Value and date of Premium Cashed, IPT rate and amount, and amount of parafiscal taxes if applicable. The IPT Book must be updated by the end of the following month. In case of tax audits the IPT payer may be asked to provide the IPT Book and related insurance contracts. FiscalReps has noticed increased requests from the Italian Tax Authorities in regards to record keeping and insurers may find this a good opportunity to address internal housekeeping.
What’s new – VAT EU: Insurance provided with leasing The European Court of Justice (“ECJ”) has given a judgment on the treatment of insurance supplied with leasing services. The lessor, BGZ Leasing, insisted that the lessee insure the goods and offered the option of arranging that insurance for no extra charge. The premium charged by the insurer was merely passed on to the lessee, even though the lessor was the insured. The ECJ decided that the insurance was a separate supply, and that it was exempt even though the lessor was not a regulated insurer. The insurance was an “aim in itself” from the point of view of the lessee and was not therefore ancillary to the main supply. This saved the lessor from the need to add VAT to the insurance recharge. Andorra: Introduction of VAT on insurance premiums From 1 January 2013 Andorra has introduced VAT with a standard rate of 4.5%, known as Impost General Indirecte or “IGI”. There are reduced and super reduced rates of 1% and 0%, and a higher rate of 9.5% which applies to banking and other financial transactions (but not insurance). The new tax is similar to the EU VAT system, but we understand insurers are still subject to the old impuesto sobre servicios indirecto “ISI” at 4%. Canada: HST or GST/PST? Canada seems to be having a crisis of confidence. The indirect tax regime there has historically been a mixture of a provincial and a federal VAT – PST and GST respectively. In the last ten years there has been a move to replace those two taxes with a single “Harmonised Sales Tax” or HST. Most provinces have now moved to the new HST, with Prince Edward Island joining the old taxes together on 1 April 2013 following many of the much larger provinces. However, British Columbia has voted to revert to the dual system with effect from the same date. Further information on any of these issues may be obtained from Peter Hewitt or Nick Hammond t: +44 (0)20 7036 8070 e: firstname.lastname@example.org / email@example.com
LAUNCH OF IPT OFFERING IN AUSTRALIAN AND NEW ZEALAND FiscalReps have launched IPT compliance services to cover clients’ premium tax obligations in Australia and New Zealand. To help insurance specialists achieve certainty over their premium tax responsibilities in Australia and New Zealand, FiscalReps has developed a tailor-made compliance manual. For more information about visit www.fiscalreps.com/anz
Did you know... FiscalReps can support your business with a number of IPT and VAT consultancy services. These include: 1. IPT and VAT compliance health checks. These can be tailored to the client’s specific requirements, and can provide assurance on the effectiveness of current tax compliance systems, identify areas for improvement and for demonstrating a pro-active approach to tax authorities. 2. IPT country reviews – to give you a detailed picture of the IPT regime in any EEA country. These can be particularly useful in the case of the more complex tax regimes such as France, Italy, Spain, and for the recently introduced new taxes e.g. Hungary. 3. Product reviews - for a detailed IPT analysis on your insurance lines (including new product launches), to ensure that premium taxes are being applied correctly and any applicable exemptions are being utilised. 4. Indirect tax helplines – to provide you with blocks of advisory time that can be drawn down at any point in the year, and any unused time rolled over to the next year. 5. IPT Rate Tables we can provide accurate and up to date premium tax data for any European country to confirm the taxes applicable to your lines of business for the specific countries in which risks are insured.
Coming up... FISCALREPS IPT AND VAT TRAINING COURSES! Following a highly successful set of fully-booked IPT courses in 2012, further sets of industry-leading IPT training courses will be held in 2013 along with the addition of three levels of VAT training courses. Coming up... IPT Basics - 4 March | IPT Intermediate - 5 March | IPT Advanced - 7 March For more information visit www.fiscalreps.com/training or contact Rebecca Taylor e: firstname.lastname@example.org | t: +44 (0)20 7036 8070 CAPITVE LIVE UK 2013 - VISIT US AT STAND 404 FiscalReps will be exhibiting at this free to attend leading captive insurance event on 12-13 February at 8 Northumberland Avenue, London WC2N 5BY Mike Stalley, Chief Executive of FiscalReps will be hosting a session on ‘Basic tax and accounting’ on Tuesday 12 February 2013, 10am-10.30am. Karen Jenner, Client Director and Joesph Finbow, Client Manager of FiscalReps along with Andrea Sutter, Insurance Manager from Solen Versicherungen AG (Shell), will be hosting a session on ‘A year in the life of a captive’ on Tuesday 12 February 2013, 11.30am-12.30pm Enter our business card drop for a chance to win a pair of tickets to watch England v Scotland at Wembley Stadium on Wednesday 14 August 2013! If you would like to arrange a meeting with FiscalReps during the conference please contact Kitty Christopherson, Business Development Manager e: email@example.com | m: +44 (0)7919 520 231 CICA 2013 INTERNATIONAL CONFERENCE - VISIT US AT BOOTH 4 FiscalReps will be exhibiting on 10-12 March at Westin Mission Hills Resort & Spa, Palm Springs, California If you would like to arrange a meeting with FiscalReps during the conference please contact Mike Stalley, Chief Executive e: firstname.lastname@example.org t: +44 (0)20 7036 8070
6. taxbox remapping – to help ensure that each product line is being treated correctly and consistently for all relevant premium taxes, identify tax efficiencies as well as any under/ over-declaration of taxes.
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