The new Dutch policy statement on insurance premium tax (IPT) was published on May 12, 2022. This policy statement updates and supersedes the earlier IPT policy statement of 2017. The new IPT policy statement contains a number of changes, the most notable of which are the following two aspects that concern the transport exemption.
- “Own transport” – The new policy statement distinguishes between goods transports by a contracted transport company and the “own transport” of certain goods. We would note that, in practice, a debate has been ongoing as to whether the insurance of “own transport” qualifies for the full or partial exemption. For this reason, we recommend reviewing the application of the transport exemption, particularly where it concerns policies that include cover for “own transport” risks.
- Temporary storage – Under the earlier policy statement, temporary storage qualified for the transport exemption under certain conditions. The new policy statement specifies a maximum period of three months for temporary storage; the maximum period under the earlier policy statement was one month. The period extension is good news. If goods are stored for more than three months, but it is sufficiently plausible that there is an absolutely necessary connection between the storage and the transport, the transport exemption may still apply. This continues to be subject to the condition that no additional premium is due for the storage. In practice, we often see that the transport exemption is applied to ancillary temporary storage that is covered by a transport insurance policy insofar no additional premium is charged. Particularly if goods are in temporary storage for more than three months, we recommend verifying whether it is sufficiently plausible that there is an absolutely necessary connection between the storage and the transport.
The new policy statement entered into force on May 13, 2022, but the changes governing the transport exemption will not take effect until May 13, 2023.
The policy statement does not address the other issues that were covered in a letter that the Dutch tax authorities sent to several insurance sector associations a while ago. These issues include the VAT and IPT treatment of intermediation and advice.
The tax advisors of KPMG Meijburg & Co’s Indirect Tax Group would be pleased to help you identify the potential implications of these developments. Feel free to contact one of them or your designated advisor for more information.