Insurers need to better demonstrate they are fully...
Insurers need to better demonstrate to clients that they are fully complying with EU Insurance Premium Tax (IPT) regulations, according to AIRMIC.
Speaking at the FiscalReps Insurance Premium Tax Forum, Paul Hopkin, technical director at the association, said insureds needed to press for fuller disclosure on IPT compliance, since they ultimately could be liable for unpaid taxes.
Meanwhile, he said insurers and intermediaries had to accept that such requests were reasonable and justified.
“At present, premium tax payments are often an article of faith between the insured and their insurer. As the insurer usually bears direct responsibility for the tax the issue is seldom examined closely by the client,” said Hopkin. “However, the complexity of European IPT means there is ample scope for miscalculation and under a European legal precedent tax authorities can ultimately pursue the insured for any unpaid taxes.”
Adrian Smith, head of IPT at KPMG, emphasised the difficulties for insurers. He said: “Over the past five years the insurance industry has become more aware of the complex EU/global requirements for premium tax. However, for insurers providing cover over several countries it remains an administrative nightmare: they face multiple tax rates, differing regulations, the need for local fiscal representatives, not to mention the language issue.
Since there is no requirement for IPT harmonisation within the EU, there are presently separate IPT regimes operated by 18 EU member states.
