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

Tax Information Reporting United States
October 21, 2019
Cryptocurrency Exchanges Serious about 1099 Reporting Despite Incomplete IRS Guidance

Ron Quaranta is founder and chairman of Wall Street Blockchain Alliance, the world’s leading non-profit trade association promoting the comprehensive adoption of blockchain technology and crypto assets across global financial markets. He will speak at the GCS Intelligent Reporting conference in San Antonio later this month. Ron spoke with Sovos recently about cryptocurrency tax regulations […]

Tax Compliance Tax Information Reporting United States
October 17, 2019
Unclaimed Property Reporting: Well Begun Is Half Done!

If you have ever had a child wait until the night before an assignment is due to ask for help, or had a client push a deadline as far back as possible to start, you know the frustration of rushed and ineffective project completion. With your unclaimed property reporting process, you can reduce this last-minute […]

Brazil E-Invoicing Compliance Tax Compliance
October 17, 2019
Brazil Implements New E-Invoice Type NF3e

Brazil is often viewed as one of the most complex tax jurisdictions in the world.  But, at the same time, it has been very successful in automating tax authority controls, and in doing so has replaced paper invoices with electronic invoices automating their exchange through clearance platforms. While the ambitious Brazilian plans to simplify the […]

Tax Information Reporting United States
October 16, 2019
Are You Considering Outsourcing Your Unclaimed Property Processes?

Managing an organization’s unclaimed property can be a full-time job. With the complexities of regulatory requirements, the numerous due diligence and dormancy tracking rules by property type and state, along with due diligence requirements, also varying by state, record retention needs in case of an audit, as well as reporting to multiple states, the process […]

Asia Pacific E-Invoicing Compliance
October 16, 2019
India Adds Clarity to New E-Invoicing Regime

Following India’s recent public consultation looking at the proposed introduction of an e-invoicing regime, the GST council has now released a white paper on the architecture of the new framework and also provided answers to a number of outstanding questions. From 1 January 2020, taxpayers in India can start to use the new e-invoicing framework, […]