1. Taxing Insurance Products: Marine and Aviation Ing. Ladislav Hanak Senior Client Manager - European Tax Practice, FiscalReps Emma Stephen Senior Client Technician - European Tax Practice, FiscalReps

2. Agenda Quiz Marine Insurance o Definition - What falls under marine insurance? o Location of Risk o Domestic vs. International o Commercial vs. Private o Risk of double taxation and exemptions o Comparison of IPT rates applicable to marine insurance Aviation Insurance o Definition - What falls under aviation insurance? o Location of Risk o Domestic vs. International o Commercial vs. Private o Risk of double taxation and exemptions o Comparison of IPT rates applicable to aviation insurance Marine vs. Aviation IPT rates Questions

3. Quiz 1. Which insurance class number covers Marine Hull risks? 2. Which insurance class number covers Aviation Hull risks? 3. Which combination of insurance classes would not cover Marine risks? 4. Who pays the premium tax? 5. Who won the 2014 World Cup in Football? a)Class 6 b)Class 7 a)Class 3 b)Class 5 a)Classes 5, 11 b)Classes 6, 12 a)Insurance company b)Policyholder a)Brazil b)Germany

4. Marine Insurance Definition Location of Risk Domestic vs. International Commercial vs. Private Double taxation Exemptions Comparison of IPT rates applicable to marine insurance

5. Marine Insurance Definition o Ships – sea, lake and river and canal vessels o All damage to or loss of River and canal vessels Lake vessels Sea vessels What falls under “Marine Insurance” o Class 6 o Class 7 o Class 12 o Combined products

6. Marine Insurance Location of Risk o Country of registration o Place of ship’s operation o Establishment of the policyholder Domestic vs. International Commercial vs. Private

7. Marine Insurance Risks of double taxation Exemptions An insurance covering damage to or loss of a ship used for non-commercial purposes which is registered in the UK and operates between the UK and Germany. What should be the IPT rate applicable? UK IPT6% DE IPT19% Effective IPT rate 25% An insurance covering damage to or loss of a ship used for non-commercial purposes which is registered in the UK and operates between the UK and Germany. What should be the IPT rate applicable? UK IPT6% DE IPT19% Effective IPT rate 25% Scenario 1 An insurance covering damage to or loss of a ship used solely for commercial purposes which is registered in the UK and operates between the UK and Germany. What should be the IPT rate applicable? UK IPTExempt DE IPT3% Effective IPT rate 3% An insurance covering damage to or loss of a ship used solely for commercial purposes which is registered in the UK and operates between the UK and Germany. What should be the IPT rate applicable? UK IPTExempt DE IPT3% Effective IPT rate 3% Scenario 2

8. Marine Insurance Comparison of IPT rates applicable to marine insurance Note: Please be aware that these are default premium tax rates. Lower rates/exemptions may apply under certain circumstances when certain criteria is met. In respect of Cyprus, the Stamp Duty depends on Sum Insured.

9. Aviation Insurance Definition Location of Risk Domestic vs. International Commercial vs. Private Double taxation Exemptions Comparison of IPT rates applicable to aviation insurance

10. Aviation Insurance Definition o Oxford Dictionary Aircraft – an aeroplane, helicopter or other machine capable of flight o Macmillan Dictionary Aircraft – a plane, helicopter, or other vehicle that flies o All damage to or loss of aircraft What falls under “Aviation Insurance” o Class 5 o Class 7 o Class 11 o Combined products

11. Aviation Insurance Location of Risk o Country of registration o Place of aircraft’s operation o Establishment of the policyholder Domestic vs. International Commercial vs. Private

12. Aviation Insurance Risks of double taxation Exemptions An insurance covering damage to or loss of a private aircraft carrying goods or people which is registered in BE. What should be the IPT rate applicable? BE IPT9.25% An insurance covering damage to or loss of a private aircraft carrying goods or people which is registered in BE. What should be the IPT rate applicable? BE IPT9.25% Scenario 1 Scenario 2 An insurance covering damage to or loss of an aircraft used for Commercial International Passenger Transport which is registered in BE. What should be the IPT rate applicable? BE IPTExempt An insurance covering damage to or loss of an aircraft used for Commercial International Passenger Transport which is registered in BE. What should be the IPT rate applicable? BE IPTExempt An insurance covering damage to or loss of an aircraft used solely for commercial purposes which is registered in the UK. What should be the IPT rate applicable? UK IPTExempt An insurance covering damage to or loss of an aircraft used solely for commercial purposes which is registered in the UK. What should be the IPT rate applicable? UK IPTExempt Scenario 3

13. Aviation Insurance Comparison of IPT rates applicable to aviation insurance Note: Please be aware that these are default premium tax rates. Lower rates/exemptions may apply under certain circumstances when certain criteria is met. In respect of Cyprus, the Stamp Duty depends on Sum Insured.

14. Marine vs. Aviation IPT rates Comparison of marine and aviation rates in 26 European countries: Note: Please be aware that these are default premium tax rates. Lower rates/exemptions may apply under certain circumstances when certain criteria is met. In respect of Cyprus, the Stamp Duty depends on Sum Insured.

15. Questions