Taxing Insurance Products: Property Insurance Susie Crew FCA Client Director - European Tax Practice, FiscalReps Nazaret Gonzalez Client Manager - European.

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Presentation transcript:

Taxing Insurance Products: Property Insurance Susie Crew FCA Client Director - European Tax Practice, FiscalReps Nazaret Gonzalez Client Manager - European Tax Practice, FiscalReps

Property Insurance

Agenda Location of risk Global policies Country spotlight Tax points, different calculation methods and rates France Spain

Location of risk What is location of risk and why is important ? Fixed property Moveable property Contents (Goods in storing) How are goods in transit treated in your company?

There are certain areas that should be considered: Regulatory compliance Terms of coverage Premium apportionment Fire / Non fire Different calculation methods Tax Points Taxes and parafiscal charges due Global policies

Spain What particular tax points, calculation methods and rates apply? Tax Points IPT (4 provinces) Fire Brigade Charge Consorcio surcharges Complex calculations with different rates Tax/Surcharge borne by insurer/insured?

Spain What particular tax points, calculation methods and rates apply? Tax Points IPT (4 provinces) Fire Brigade Charge Consorcio surcharges IPT – Cash received Consorcio - Inception date Tax rate: 6% 4 provinces, Navarra and the Basque country have the power to maintain, establish and regulate its own tax regime The rate of FBC in Spain is 5% on pure fire premiums and 2.5% on multi-risk premiums Rivas Vaciamadrid new rate of 7.50% in addition to the 2.50% and 5.00% Should be treated as “cost to the insurance company” Complex calculations with different rates

Spain How many returns & reports an insurance company can submit per year in Spain? 65 IPT returns + 46 CCS + 1 FBC = 112 IPT (Central Administration = 12 * 5 provinces = 60) monthly + Annual report (Central Administration = provinces = 5) = 65 Consorcio (monthly Modelo 10 & 11 & 20 = 36 + quarterly Modelo 50 = 4 + Statistical report Modelo 0-6 = 6) = 46 1 Annual FBC report

Spain A company insures its factory located in Madrid against Property Damage/Business Interruption risks. The premium allocated is EUR 30,000. Type of risk Industrial Loss of profit indemnity period18 months Coverage period12 months Total capital insured for damagesEUR 450,000 Total capital insured for loss of profits EUR 35,000 Limit of indemnity EUR 35,000 1.What are the classes of insurance covered? 2.What are the premium taxes and parafiscal taxes due? 3.What is the total amount of tax due?

Spain 1.What are the classes of insurance covered? 2.What are the premium taxes and parafiscal taxes due? Class 9 – Other damage to Property IPT, FBC, Winding Up Activity Surcharge, CONSORCIO Surcharge – Property Damage, CONSORCIO Surcharge – Business Interruption

Spain 3. What is the total amount of tax due? *Different tax points

Spain 3. What is the total amount of tax due?

Spain 3. What is the total amount of tax due? TOTAL EUR = * 95% =

France What particular tax points, calculation methods and rates apply? Tax Point Split between fire/non fire IPT CatNat (IPT & MRPF) Market practice calculation GAREAT (IPT) Terrorism Charge

France What particular tax points, calculation methods and rates apply? Tax Point Split between fire/non fire IPT CatNat (IPT & MRPF) Market practice calculation GAREAT (IPT) Terrorism charge Maturity date 9% non fire premium 7% fire premium CatNat premium = premium * 12% CatNat IPT = CatNat premium * 9% MRPF = CatNat premium * 12% GAREAT premium = premium * 18% GAREAT IPT = GAREAT premium * 9% EUR 3.30

France A company insures its factory located in Paris against Property Damage/Business Interruption risks. The premium allocated is EUR 50,000 and the apportionment is: 30% for Fire, 20% for Business Interruption and 50% for Other damage to Property. 1.What are the classes of insurance covered? 2.What are the premium taxes and parafiscal taxes due? 3.What is the total amount of tax due?

France 1.What are the classes of insurance covered? 2.What are the premium taxes and parafiscal taxes due? Fire, Other damage to property and Miscellaneous Financial losses (Class 8, 9, 16) IPT, MRPF and TER

France 3. What is the total amount of tax due?

France A prestigious hotel company subscribes a property all risks/business interruption policy for its hotel located on the Champs-Elysées Avenue in Paris. The hotel value is estimated at EUR 35,000,000 and the base premium is EUR 10, The Fire element is 25% of the premium. 1.What is the amount of premium taxes due?

France 1. What is the total amount of tax due?

Questions