Insurance premium tax is a tax levied on insurance. If your company is international, then the levying of this tax is complicated. There are indeed big differences between the insurance premium tax regimes of various countries. However, even for a Dutch company, it is important to be aware of your risks and opportunities. Meijburg & Co’s professionals are here to help you with this.
Differences between insurance premium tax and VAT
Insurance premium tax and VAT are often compared with each other as they are both indirect taxes. Moreover, in the Netherlands both have a rate of 21%. However, there are also a few important differences. For example, in contrast to VAT, companies cannot reclaim insurance premium tax. As a result, insurance premium tax is a cost item for both companies and individuals.
In addition, a number of agreements have been reached between countries with regard to VAT. In contrast, insurance premium tax has been left virtually unharmonised. As a consequence, scope, calculation method and rates can vary greatly between countries. Even within the European Union there are considerable differences. For example, the Netherlands primarily levies insurance premium tax on general insurance. In other countries, it is also levied on life insurance. Some EU member states have no insurance premium tax regime whatsoever. None of this makes matters any easier for you.
An important factor in international insurance
As an insurer, broker or multinational, you often have to deal with cross-border insurance. Insurance premium tax is an important factor here, for two reasons. Firstly, it is important to determine the costs of insurance premium tax on worldwide insurance programmes. Secondly, it is very important that you have a clear overview of your compliance obligations.
Challenges for multinationals
Our specialists are here to assist multinationals on issues involving insurance and tax. This particularly applies when you have your own captive insurer in your group. However, even without a captive insurer, insurance premium tax may remain important, sometimes unwittingly. For example, multinationals often unintentionally pay too much insurance premium tax. This is usually due to double taxation. In addition, you may be confronted with over-allocation to countries with a high tax percentage. At the same time, multinationals sometimes fail to meet their compliance obligations. That’s why we are here to provide you with advice on insurance premium tax, also during checks by the Dutch Tax Authorities.
Technological solutions for insurance premium tax
Apart from tax advice, we’re also here to help with technological solutions. For this reason, we have developed an advanced data analysis tool. This allows us to check large premium volumes for insurance premium tax risks within minutes. The tool also has a dashboard function. This provides insight into the position, risks and opportunities identified. In this way, you will know where you stand almost immediately.
Need advice on insurance premium tax?
Do you require broker advice on insurance premium tax? Or, as a multinational, do you require assistance in dealing with insurance premium tax internationally? Meijburg & Co’s team of specialists is here to help. We have experts specialised in both domestic and international insurance premium tax regimes. Moreover, we are part of KPMG’s global network. As a result, we can take on even the most complex insurance premium tax issues. We’re looking forward to getting to know you.