FiscalReps Newsletter March 2013 6th edition
What’s new – Premium Taxes Italy – IPT prepayment due in May Insurers registered for IPT in Italy should remember that the prepayment for year 2014 is due in May. We expect to receive official notification of the deadline to be published on the Italian tax authority’s web-site in the next few weeks. Finland monthly deadline extended 5 days for on-line IPT filing FiscalReps has negotiated a special arrangement with the Finnish tax office which permits us to submit on-line IPT returns rather than the usual paper filing. For clients who have registered to file IPT returns online the submission deadline will be pushed back from the normal filing date of 7th of the month to the 12th of the month. This is a very welcome change for this early reporting country giving FiscalReps’ clients an extra 5 days for data collation. Denmark The Danish tax authority, SKAT, has confirmed that some insurance premiums received in 2012 may be subject to both stamp duty (abolished 31 December 2012) and Non-Life Insurance Tax (the new IPT). This arises because a liability
to stamp duty arose on the date that a taxable insurance was “taken out” (issued) whereas the tax point for IPT is the date of premium notification. Clearly there is a potential for taxable policies to be issued in, for example, December 2012 and the premium to be notified to the insured in January 2013, in which case both taxes could be payable on the same transactions. Spain – new applications UNESPA are due soon
Insurers writing fire in Spain and not currently members of UNESPA should consider applying for membership. Although membership is not compulsory insurers who become members pay Spanish Fire Brigade Charge to UNESPA rather than to each of the Spanish municipalities (there are over 200) in which the risk is located. UNESPA only accept new members once per year and applications for membership (including the relevant Power Of Attorney) should be submitted in April. The annual shareholders meeting, in which new member applications are considered, takes place in June. Any insurers wishing to become members should ensure their applications for membership are submitted in time for consideration.
IPT on long term insurance On 21 February 2013 the European Court of Justice issued its judgment in the case of RVS Levensverzekeringen NV v Belgium (Case 243/11). This decision has implications for life assurers and composites who write long term insurance policies under Freedom of Services. Such insurers may find they have obligations to pay premium taxes and/or parafiscal charges in other EU Member States if the policyholder relocates from the Member State in which they resided when the policy was first taken out. Long term insurance policies are subject to indirect taxes (e.g. premium taxes and parafiscal charges) in a number of EU Member States. The Member State in which such taxes arise, as provided for in the Life Insurance Directive, is the Member State of habitual residence for natural persons and the Member State of establishment for corporate policyholders. However, as this judgment now confirms, the determination of the Member State for such taxes is not fixed and can change if a policyholder relocates to another Member State, with the result that an insurer can find that it has new obligations to file and pay premium taxes in the Member State to which the policyholder has relocated. For further details please see our alert published on 26 February 2013.
What’s new – VAT UK: Recovering VAT on acquisition costs The Court of Appeal has ruled in the case of BAA Limited. A new company “ADIL” was formed to acquire the shares of the BAA group, and ADIL incurred significant VAT on costs associated with the takeover. However, it did not make any management charges to BAA before joining the BAA VAT group and sought to argue that, once it had joined the VAT group, the input tax was attributable to the taxable outputs of the trading companies in the group. HMRC initially refused membership of the VAT group, and when they later allowed it they argued that there was no longer any “direct and immediate link” with the taxable outputs of the group. If ADIL had made management charges to BAA before it joined the VAT group, there appears to be a good chance that it would have been able to justify its VAT claim. Alternatively, if it had evidence of its intention to join the BAA VAT Group immediately on becoming eligible it is possible that it might have been able to justify its claim (particularly if it had not incurred the VAT until after VAT grouping took effect). However, in this particular case it had made no such charges and held no such evidence. The case will be critical to those incurring VAT on take-over costs, in that it gives guidance on the evidence and actions which will be needed to secure recovery of such input tax. In view of the large amount of tax involved, however, this may not be the end of the story and BAA might seek to appeal further to the Supreme Court. Bahamas: Introduction of VAT from 2014 The Bahamian Ministry of Finance has announced the introduction of a VAT system from 1 July 2014. The standard rate will be 15%, with a reduced rate of 10% for accommodation and catering in hotels. There will be exemptions for financial services,
healthcare, education and the like. There is no draft legislation yet, but from the White Paper it appears that insurance may be taxable except to the extent that it reflects investment rather than risk coverage. Turks and Caicos Islands The islands are not keen to introduce VAT as insisted upon by the UK government, which has been administering the jurisdiction temporarily. The UK Government has capitulated in the face of sustained lobbying and will now allow the island to decide for itself whether VAT is to be introduced, with the proviso that the budget must still show surpluses from other taxes/income. The tax was due to be introduced on 1 April at 11%. Bulgaria – Gold Standard for VAT refunds From 1 March, Bulgaria is offering “gold standard” rules which will accelerate VAT refunds so they are received within 10 days of a claim. There are other preferential benefits, but businesses must meet strict criteria to qualify including having been compliant and in profit. Croatia – EU Member State from 1 July 2013 With effect from 1 July 2013 Croatia will become the 28th Member State of the European Union. Apart from allowing insurers to write business in Croatia on a freedom of services basis, this will also change many of the VAT accounting rules on trade with Croatia. Insurers should be prepared for this change in relation to VAT and all indirect taxes, including the IPT and fire brigade tax which it is understood currently apply to Croatian insurers. 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
Did you know... FISCALREPS IS CELEBRATING BEING NAMED ‘TAX ADVISORY FIRM OF THE YEAR’ AT THE UK CAPTIVE SERVICES AWARDS 2013
Coming up... FISCALREPS IPT AND 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... VAT Basics - 24 June VAT Intermediate - 25 June VAT Advanced - 26 June For more information visit www.fiscalreps.com/training or contact Rebecca Taylor e: firstname.lastname@example.org t: +44 (0)20 7036 8070 AIRMIC ANNUAL EXHIBITION 2013 - VISIT US AT STAND 79 FiscalReps will be exhibiting on 10-12 June at the Brighton Centre, Brighton. If you would like to arrange a meeting with FiscalReps during the conference please contact: Kitty Christopherson e: email@example.com t: +44 (0)20 7036 8070
European Forums 2 1
16th April London, United Kingdom - VAT Mini Forum 19th April Dublin, Ireland - IPT European Forum 22nd April Zagreb, Croatia - IPT European Forum 21st May Munich, Germany - IPT European Forum
25th July Madrid, Spain - IPT European Forum
27th September Milan, Italy - IPT European Forum
14th October Paris, France - IPT European Forum
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