FiscalReps Newsletter February 2014 17th Edition
What’s New – Premium Taxes San Marino – Update on New IPT The Republic of San Mario has published regulations covering the detailed compliance requirements of the new IPT which became effective on 1 December last year. Foreign insurers that are registered with the Central Bank (the national insurance regulator) and are writing risks in San Marino are required to appoint a local fiscal representative. Other requirements include IPT payment at quarterly intervals (by end of month following each quarter end) and an IPT return which is due annually by 31 May of the following year. The IPT due for December 2013 should be paid at the same time as that for the first quarter of 2014 i.e. by 30 April 2014, and reported as part of the IPT return for 2014 (by 31 May 2015). The Central Bank is taking steps to remind insurers of their obligations under the new IPT. In January it issued information letters to all insurers who are authorised to write taxable insurance contracts in the Republic of San Marino. In particular the letter reminds each authorised foreign insurer of the requirement to appoint a local tax representative and notify the name of the designated representative to the Bank in accordance with the regulations.
Other foreign insurers who engage directly with policyholders without introduction from a local intermediary are not required to appoint a local fiscal representative but must settle all IPT due annually by 28 February. Denmark – increase in rate of Environmental Contribution On 20 December 2013 the Danish Parliament approved an increase in the Environmental Contribution that is due on certain motor third party liability policies. As from 1 April 2014 the contribution will increase from its current rate of DKK60 per insured vehicle per year to DKK 101 per insured vehicle per year. The official notice confirms that the increased rate will not apply retroactively and provides examples of how the current and new rate will operate in the transitional period. For example, if a single annual premium is billed in the first quarter 2014 for the whole of 2014, the contribution payable is DKK60 for the year. However, if a premium is billed twice per year, the first instalment in the first quarter, then DKK30 is due at the first receipt (DKK5 x 6 months) and DKK50.5 (DKK8.41 x 6 months) at the final instalment.
Slovenia - update on discussions with the Slovenian Trade Body (SSZ) FiscalReps has entered into a dialogue with the Slovenian Tax Office and the Slovenian Trade Body (SZZ) over the last few months to determine how IPT should be applied to insurance classes 7, 10, 11, 12 and 14 in accordance with the IPT legislation. There is a degree of uncertainty in relation to International Goods in Transit and International Carriers Liability. Market practice has been to apply an exemption to these sub classes. The SSZ considers that insurance classes 7, 10, 11 and 12 are subject to IPT. Furthermore the SZZ considers that Export credit/class 14 should continue to be treated as exempt. We are taking our findings to the Slovenian Tax Office and seeking a meeting to ensure a consistent and compliant treatment of IPT in Slovenia.
What’s New – VAT UK – Guidance on the Recovery of VAT on Acquisition Costs HMRC has promised to publish guidance on the rules for recovering VAT on the costs of corporate acquisitions, following their win in British Airports Authority (BAA). It should be possible to plan for VAT recovery, at the residual rate of the trading business at least. It is expected the guidance will be available in February. UK – Publication of Guidance on Cost Sharing Groups EU – Reference to the European Court on Extended Warranties A reference has been made to the Court of Justice of the European Union (CJEU) from the French courts in the case of Mapfre Warranty SpA. The questions asked aim to determine whether an extended warranty for a motor vehicle, provided by a different person from the vehicle dealer, amounts to an insurance contract for VAT purposes. In the UK and many other Member States a distinction is drawn between a warranty (subject to VAT) and an insurance contract (subject to premium taxes), and this case may lead to changes in that line of reasoning. It may apply to all separately supplied extended warranties, not just for motor cars. A judgment is not likely until 2015 at the earliest. EU – Extension of Pilot Project for Legal Certainty The VAT pilot aimed at improving legal certainty for cross border transactions has been extended for another year, and opened to other Member States. Those currently engaged in the project are Belgium, Estonia, Spain, France, Cyprus, Latvia, Lithuania, Malta, Hungary, the Netherlands, Portugal, Slovenia, Finland and the United Kingdom. It is primarily aimed at smaller businesses, who can submit a proposal to their home tax authority for the VAT treatment of a cross border transaction and the home tax authority will agree it with the other tax authorities involved.
HMRC has published its guidance manual on the cost sharing exemption, implemented in July 2012. There are no major surprises in the latest guidance, which broadly confirms and clarifies their earlier information on the subject. Because of the availability of exemption for claims handling and other insurance related costs, insurers in the UK have so far shown little interest in the exemption, but it will become important if the UK is forced to implement the Andersen judgment of the CJEU in the future. The cost sharing exemption is used commonly in other countries which currently do not allow exemption for claims handling.
for hotels and restaurant supplies was increased to 9%. The increases were first planned in 2012 and implemented in stages in January 2013 and January 2014. At present we believe there are no further plans to change the rates which are 19%, 9% and 5%. New Zealand – New Facility to Register for GST From 1 April 2014 there will be a new facility for non-resident businesses to register in New Zealand for Goods and Services Tax (GST). General insurance is subject to GST at 15% in New Zealand and this development could mean that insurers without a place of business in New Zealand may need to comply. It should also be possible to recover GST on costs, including claims costs, if this has not already been claimed by the policyholder. Cook Islands – Increased VAT Rate The Cook Islands have announced a proposal to increase the VAT rate from 12.5% to 15% from 1 April 2014. This would bring the VAT rate into line with the GST rate in New Zealand, of which it is a protectorate.
Cyprus – Increased VAT Rates
Further information on any of these issues may be obtained from Peter Hewitt or Nick Hammond
The standard rate of VAT was increased from 18% to 19% with effect from 13 January 2014. At the same time the reduced rate of 8%
t: +44 (0)20 7036 8070 e: email@example.com / firstname.lastname@example.org
FiscalReps are delighted to have been shortlisted for Tax Advisory Firm of the Year at the 2014 UK Captive Services Awards
FREE TO ATTEND FiscalReps Masterclass: An Introduction to Insurance Premium Tax (IPT)
Now in their second year, the UK Captive Services Awards, organised by Captive Review, recognise excellence in the delivery and management of captive insurance and celebrate those who have excelled over the past year.
IPT legislation has considerably changed in the current economic situation and these changes show no sign of slowing.
Having won the award for Tax Advisory Firm of the Year in 2013, and Technology Firm of the Year in 2012 at the US Awards, Mike Stalley commented that ‘being shortlisted again in 2014 is wonderful recognition of the reputation we have built as an insurance industry specialist and reflects the extremely hard work of our dedicated team’. FiscalReps will be exhibiting at Captive Live UK on 24-25 February 2014 at the Royal College of Surgeons, London. Visit us at Stand 201 or email email@example.com to arrange a one to one meeting. FiscalReps will be represented by Mike Stalley FCA, Chief Executive and Karen Jenner, Client Director Captive Practice. FiscalReps are Exhibiting at Insurance Week 18-20 February 2014 Centro de Convenciones Norte-IFEMA , Madrid
Understanding and managing the complexity of IPT is an increasingly important task for insurance professionals when transacting business across the European Union.
Training Calendar 2014 IPT Foundation 3 March 29 September IPT Intermediate 4 March 30 September IPT Advanced 5 March 1 October VAT Foundation VAT Intermediate
12 May 6 October 13 May 7 October
The Masterclass in London is directed at attendees new to the insurance industry with little or no experience with Insurance Premium Tax (IPT). The Masterclass will provide attendees with the basic knowledge of IPT, including the process of settling premium taxes and also key European issues in more detail.
VAT Advanced 14 May 8 October
This Masterclass is free to attend and will be hosted by Susie Crew, Client Director – European Tax Practice of FiscalReps and Joseph Finbow, Senior Client Manager – Captive Tax Practice of FiscalReps.
Eastern European Technical Training 19 June 23 October
Date: 12 February 2014 Venue: 10 Fenchurch Avenue London EC3M 5BN Time: 10:45 – 12:30 To register your free place at this event please contact Ruth Thompson t: +44 (0)20 7036 8070 e: firstname.lastname@example.org
The key meeting point for the Spanish Insurance Sector. Through the many forums, meetings and conferences sector experts gather to analyse and research about the current situation of the insurance sector. An opportunity to look at its problems, trends and what lies ahead in the future. FiscalReps will be represented by Nazaret Gonzalez, Client Manager - Compliance Services.
Spanish Technical Training 17 June 21 October French Technical Training 18 June 22 October
Course Fees Per Attendee IPT Foundation IPT Intermediate IPT Advanced
£495 & VAT £495 & VAT £495 & VAT
VAT Foundation VAT Intermediate VAT Advanced
£495 & VAT £495 & VAT £495 & VAT
Spanish Consorcio Tax £495 & VAT French CATNAT Fund £495 & VAT Eastern European Tax £495 & VAT
New for FiscalReps Diploma September in Insurance Premium Tax 2014
For more information contact Rebecca Taylor t: +44 (0)20 7036 8070 e email@example.com
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 4994134) FiscalReps®, taxbox® and taxDNA® are all registered trademarks owned by Fiscal Reps Limited
t: +44 (0)20 7036 8070 | www.fiscalreps.com @fiscalreps
Published on Feb 3, 2014