Key Reporting Considerations for Insurers Writing Insurance Across the EU

Elliot Shulver
May 23, 2019

Freedom of services insurers are faced with a number of different obligations when entering new territories and writing insurance business within the European Union.  One that may initially be overlooked relates to which policy details are required to be recorded and then reported to the tax authorities.  

It is essential that all insurance premium tax (IPT) and parafiscal details are accurately collected and complete for all new territories where insurance is written in order to comply with the varying rules and regulations that apply in each regime.

Detailed information at a policy level may not actually be needed for the tax return itself as these are often concise declarations.  Instead, additional reports may be due that require the insurer to disclose this additional, detailed information at the policy level.  

The more complicated reports are required by the Portuguese, Italian and Spanish tax authorities.

Portugal – The ANPC report relates to the Portuguese fire brigade charge and is a prime example of a reporting requirement that a foreign insurer may not be aware of when first entering the market. This report is due twice every fifth year and relates only to that year’s ANPC contributions.  Insurers writing policies covering fire risks must complete the report which requires the ANPC contributions be split between Portugal’s 300 plus municipalities.  While this information is usually collected, the infrequency with which it’s reported on can mean insurers’ systems are not sufficiently geared up to extract this level of detail.

Italy – Detailed policy information should be recorded and kept for all premiums collected in this country.  Insurers’ systems should be able to report the required details on a regular basis.  One area that should be captured and recorded, which can sometimes be onerous, is the policyholder’s fiscal code since this is an unusual requirement compared to other EU member states.  Insurers writing policies from less burdensome taxation regimes can be caught out by and be unaware of this particular requirement.

Spain – The Consorcio de Compensación de Seguros, a compulsory governmental catastrophe insurance scheme, introduced new reporting requirements which came into effect from 1 January 2019.  The monthly report requires transactional, line-by-line reporting, including detailed policy information such as the insureds’ postcode, sum insured and indemnity limits.

It is perhaps not surprising that a fragmented insurance premium tax landscape across the European Union results in such diverse requirements which understandably can create further challenges for insurers’ underwriting and tax compliance systems. 

Failing to capture the required reporting information in each tax regime could lead to delays or even non-submission of reports. This could have further consequences for non-compliance as without a complete report it may not be possible to settle the tax which could, in turn, trigger penalties in that regime.

Having a robust understanding of local requirements from a freedom of services perspective is just as essential as knowing the tax treatment itself.

Take Action

To read more about the insurance landscape, download Trends: Insurance Premium Tax and follow us on LinkedIn and Twitter 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Elliot Shulver

Elliot Shulver is a client manager for indirect tax at Sovos. He joined the company in April 2014, having spent the previous two and a half years living and working in Australia and New Zealand. He is responsible for Gambling Duties, as well as researching and managing consultancy projects and technical knowledge for IPT.
Share This Post

Sales & Use Tax United States
August 22, 2019
Benefits of Sales Tax Automation Software and Deployment Options

You operate a lean tax compliance and reporting team. Maybe your company has reduced staff over the past 5-10 years while continuing to grow its business through organic means as well as merger and acquisition.  But now your staff of 10 is down to four or five. What was once a manageable manual process of […]

Tax Information Reporting United States
August 19, 2019
Negative Reporting – What If I Have No Records to Report?

If you have no new unclaimed property records for a particular state this filing year, does that mean you are off the hook? Well, not necessarily.   Most states want you to file with them each year. If you’ve reported in the past, they want to hear from you even in the years when you […]

Tax Information Reporting United States
August 19, 2019
To Aggregate or Not to Aggregate – There Is No Question – Not

Article written By Bill Dadmun, Records and Receipts Manager, State of Virginia   How many of you use the aggregate function when reporting?  Does it make your life easier?  Listen to this scenario and tell me if it sounds familiar.   You get a call from someone that is due $49.95 from a credit balance.  […]

Tax Information Reporting United States
August 19, 2019
Reciprocal Filing – Why You Should Proceed with Extreme Caution

This isn’t the first time I’ve blogged about the dangers of reciprocal filing, but I feel like it is a topic worth covering again for those who may have missed it. Reciprocal or exchange filing means reporting records to a state even though the last known addresses for the records are not in that state. […]

Tax Information Reporting United States
August 19, 2019
Demystifying Codes for Unclaimed Property Compliance

Have you ever been confused about which property code to use for a certain type of property? We have all been there. NAUPA, the National Association of Unclaimed Property Administrators, has a list of standard codes that you can view here starting at the bottom of page 23.   Each code is made up of two alpha […]