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FiscalReps Newsletter November 2013 14th edition

What’s new – Premium Taxes France - Tax Point for the Contribution Rentes in France FiscalReps have recently received some clarification regarding the application of the new 0.8% contribution (Contribution Rentes) due to the Fonds de Garantie in France on motor liability policies. The tax point should be the policy issue date (or policy renewal date for an existing policy). Existing policies at the introduction date of 1 July 2013 are not subject to the new charge until renewal. If the annual premium is not known when issuing the policy, FiscalReps understand that the 0.8% contribution should be declared based on the estimated premium for the year. If the premium paid for the year is more than the estimation at the beginning of the year, no additional contribution is due on the difference. By the same token, it will not be possible to reclaim or offset any contribution over-declared if the amount of premium received during the year is less than the estimation at the beginning of the year.

Life Premium Taxes FiscalReps is currently updating its database of premium taxes and parafiscal charges applicable to long-term insurance classes across all EU/EEA tax jurisdictions. Following the recent European Court judgment in the case of RVS Levensverzekeringen NV v Belgium (Case 243/11), life insurers and composite insurers will need to keep abreast of such information to ensure that relevant taxes are paid when a policyholder relocates to another EU/EEA Member State. If you require assistance in relation to such taxes please contact: Paul Chater, Client Director t: +44 (0)20 7036 8070 e: Czech Republic – No News on Introduction of IPT Based on the information we have recently received from the Czech Association of Insurers (CAP) it seems that the Czech Republic is no nearer to introducing a premium tax. The Czech Parliament’s original decree (Decree nr. 361 of 23rd May 2012) stated that draft IPT legislation would be presented to Parliament by 31st December 2013 for its approval. With recent elections in the country it seems that this has now been delayed.

New Signatories to Convention on Mutual Administrative Assistance Earlier this month Andorra and Hungary became, respectively, the 60th and 61st countries to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters during a ceremony at the OECD. This follows the signing of the Convention by Switzerland and Chile in October. Liechtenstein is expected to sign during the Global Forum on Transparency and Exchange of Information for Tax Purposes taking place in Jakarta on 21-22 November.

FiscalReps is named Insurance Premium Tax Compliance Consultancy of the Year!

What’s new – VAT

EU – Unified VAT Return

UK – Compound Interest Claim by Littlewoods

We mentioned in the 7th edition of FiscalPress that the European Commission had proposed a common VAT return for all Member States in a report on 8 March 2013. This has progressed and on 23 October 2013 the full legislative proposal was tabled for discussion and eventual adoption by the European Parliament and the European Council, once all Member States agree. The latest proposal is for just five entries – three VAT entries for output tax, input tax, and net payable or claimable, and two entries for net figures of sales and purchases. However, there is still the option for Member States to request further details in as many as 21 additional entries. Standardisation should bring benefits to international businesses trying to comply in many of the 28 countries. The minimum accounting period to be covered becomes one month with the option to increase that to as much as one year. For businesses with a turnover of less than €2m the minimum accounting period is three months. The annual summary return currently required in some countries will no longer be allowed in addition to the more frequent returns. It is estimated that it will still be some years before this law is passed and amendments to national legislation are effective, but the Council’s working party is expected to begin examining the proposal next month. The target date is 1 January 2017.

The litigation in Littlewoods has been rumbling on for 10 years now, but is worth over £1bn. The Court of Justice of the European Communities confirmed in Case C-591/10 that Littlewoods were entitled to interest in addition to repayment of the VAT incorrectly accounted for, but whether this should be calculated on a “simple” or a “compound” basis was left up to the UK courts. The case was referred back to the High Court and a hearing commenced on 28 October 2013. The difference between a simple and a compound interest calculation is enormous, as the VAT claim was submitted before the introduction of the cap on claims. It goes back to 1973. A business which made such retrospective claims before the window of opportunity closed will be watching this case with great interest! However, there has been a suggestion that such a business which did not register a compound interest claim with the High Court may not benefit from any decision in favour of Littlewoods.

the VAT Directive, but it is difficult in practice to establish the meaning of economic links. The judgment will ease the rules around this and insurers should look again at the possibility of VAT grouping.

Portugal – Removal of Requirement for VAT Invoices Portugal has proposed that the requirement for suppliers of financial services and insurance to issue a VAT invoice to a customer registered for VAT in another Member State should be removed from VAT law with effect from 1 January 2014. This should assist insurers greatly. Portugal – Amnesty until 20 December 2013 Portugal is operating a VAT amnesty for those wishing to regularise their position in the next month. There will be no interest charge and reduced penalties.

Malaysia – New VAT System with 6% Standard Rate

Netherlands – Supreme Ruling on VAT Groups


The Dutch Supreme Court has issued a judgment which will make it easier for insurers and others to join a VAT group in order to make savings of VAT on intra-group supplies. The VAT grouping provisions in the Netherlands insist that in addition to financial and organisational links between the members, there must also be economic links. This follows

Malaysia has delayed the introduction of a VAT system to 1 April 2015. It has recently been decided that the standard rate will be 6%, and VAT grouping will be available. General insurance or reinsurance will be taxable, but life insurance and reinsurance will be exempt. Further information on any of these issues may be obtained from Peter Hewitt or Nick Hammond t: +44 (0)20 7036 8070 e: /

t: +44 (0)20 7036 8070 | @fiscalreps Head office: 10 Fenchurch Avenue | London | EC3M 5BN | UK FiscalReps Registered office: 200 Fowler Avenue | Farnborough Business Park | Farnborough | Hampshire | UK FiscalReps is a trading name of Fiscal Reps Limited | Registered in England and Wales (company number 04994134) FiscalReps®, taxbox® and taxDNA® are all registered trademarks owned by Fiscal Reps Limited

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