Norway has an indirect tax that applies to elements of coverage under a motor insurance policy. This blog details everything you need to know about it.

As with our dedicated Spain IPT overview, this blog will focus on the specifics in Norway. We also have a blog covering the taxation of motor insurance policies across Europe.

 

Which taxes are payable in relation to motor insurance policies in Norway?

In 2018, Norway replaced the collection of traffic insurance tax with a new fee known as the Traffic Insurance Fee (TRIF). This fee is collected by the insurance companies on behalf of the Norwegian State, together with the premium for third-party motor liability insurance coverage.

The annual insurance tax needed significant administration. As such, implementing a new tax scheme on mandatory automobile third-party liability insurance policies aimed to streamline and speed up tax and excise administration. With the new approach, insurance companies must invoice TRIF together with the premium amount sent to registered vehicle owners. The fee is clearly stated on the invoice in a distinct line aptly named “Traffic Insurance Fee”.

 

How is TRIF on motor insurance policies calculated in Norway?

In Norway, the TRIF is charged for all registered cars that weigh under 7,500 kg. The Norwegian Tax Office collects the so-called weight-year tax on heavier vehicles, in which the TRIF is not due.

Norway charges the fee for insurance contracts on compulsory third-party liability insurance regarding motor vehicles registered domestically. The fee also applies to the sum received by the Norwegian Motor Insurers’ Bureau for uninsured motor vehicles or when the new owner has not taken out insurance for the motor vehicle.

There is no insurance premium tax on insurance policies covering Class 3 policies.

As stated above, insurance companies collect TRIF at the same time as the premium, so the fee is distributed in accordance with the frequency of premium payment. This can be monthly, quarterly, semi-annually or annually.

TRIF is a daily fee based on the type and usage of the vehicle. Vehicles are classified into five classes, from a) to f).

The new rates take effect on 1 March each year. This means that if the policy is issued or renewed on or after this date, the new rates will apply. The rates for 2024 range from NOK 0.37 (approx. EUR 0.032) for group e) to NOK 9.11 (approx. EUR 0.80) for group b).

 

What vehicles are exempt from tax in Norway?

Exemptions from TRIF occur based on the car’s usage or the owner. For example, motor vehicles registered at the Nordic Investment Bank that are used for official bank operations are exempt from TRIF. Vehicles registered at NATO or NATO headquarters, forces or personnel, as defined by international agreements, are also excluded. The exemption also applies to stolen cars.

The Ministry has the authority to issue regulations for implementation, delimitation and exemption criteria.

It is also worth mentioning that if liability insurance is not compulsory to take out, for example, in the case of the Norwegian state, municipalities or local institutions, the person responsible for the motor vehicle will be considered “self-insured”. In these circumstances, TRIF is not due.

Read our IPT Guide to learn more about Insurance Premium Tax compliance.

Have questions about the taxation of motor insurance policies or IPT in Norway? Speak to our experts.

The Goods and Services Tax Network (GSTN) has announced updated to its e-invoicing initiative, accompanied by the launch of an enhanced e-invoicing portal.

The new features included in the revamped e-invoice portal include:

Additionally, an enhanced version of the e-invoice verifier app is forthcoming.

For further details concerning the Indian e-invoicing system, you can visit our website.

Pursuant to the Service Tax (Rate of Tax) (Amendment) Order 2024, effective 1 March 2024, the service tax rate is increased from 6% to 8% on all taxable services except for food and beverage preparation, telecommunications, parking provision services, and logistics, which will remain at the 6% rate.

The order can be found here (in Malay).

The Zambian Revenue Authority (ZRA) announced that as of July 1, 2024, all VAT registered taxpayers are mandated to issue e-invoices through the Smart Invoice software solution implemented by ZRA.

This announcement follows Zambia’s initiation of e-invoicing plans in 2023. Taxpayers will only be eligible to claim input VAT or deductions based on invoices generated within this new system. The Smart Invoice software solution provides accessibility across various devices and can be obtained by logging into the Smart Invoice Taxpayer Portal.

The scope of Insurance Premium Tax (“IPT”) has been extended to brokers and intermediaries by the Act from 28 December 2023. As a result, beginning in 2024, income, such as commissions, received by an intermediary in connection with the provision of insurance services, will be liable for IPT when provided under a contract separate to the underlying insurance policy, if certain conditions are met.

A notification about this change was recently published on the Belgian Tax Office’s website. This notification advises insurance brokers that the first due date for settling their IPT obligation will be 20th of June as the Tax Office has acknowledged that it is in the process of working out the details of its application. At this stage, no more specifics were communicated, and it is expected that further details, such as how to declare the January to May periods and whether they should be declared on one or five returns, will be communicated prior to the deadline.

Alongside the developments of the CTC e-invoice reporting mandate in Malaysia, the Malaysia Digital Economy Corporation (MDEC) has become the Peppol Authority in the country.

MDEC is implementing the Peppol framework in Malaysia and it will be available for the exchange of e-invoices, complementing the e-invoice reporting mandate, which will not handle the delivery of e-invoices between the parties.

Nonetheless, the Peppol framework in the country is subject to local accreditation requirements and only Peppol Accredited Service Providers or Peppol Ready Service Providers who have gone though the technical and formal accreditation processes can be used.

MDEC has now released the first version of the e-invoicing specifications for Peppol in Malaysia, in compliance with the Peppol International PINT Model. The documentation includes specifications for the billing process as well as for self-billing processes.

The recent Order from 30 January 2024 has amended the rate and the calculation basis for the insurer’s part of the contribution that is payable to the National Guarantee Fund. More specifically, it has changed the contribution payable by the insurers on premium amounts covering civil liability risks resulting from accidents caused by motorised land vehicles and trailers or semi-trailers of vehicles.

The new rate is 0.58% which is calculated based on the premiums and contributions. The amendment came into force with immediate effect, that is from 31st January 2024.

This is a substantial change in the calculation method of the insurer’s contribution. Previously, the insurer part of this contribution was based on the total expenses in the so called “automobile” section of the Guarantee Fund and the rate was 14%. The 2024 budget law, issued on 30th December 2023, has already foreseen this change when it shifted the contribution basis from “proportional to the premiums or contributions for the last financial year” to “based on all premiums or net contributions that insurers receive”.

Another notable change in relation to this contribution is the regularity of the settlement. This contribution, until 2024, was an annual contributions due by July the following year, calculated and levied by the Guarantee Fund. As of 2024, the contribution is payable on a monthly basis and the taxable premium is declared on the Guarantee Fund website. Payment is required to be made based on the letter sent by the Fund each month to the insurers.

On 26 February 2024, Israeli Tax Authority (ITA) announced an additional extension until May 5, 2024, for the implementation of Israel’s invoice clearance model.

The new Israeli invoicing model envisages a clearance system for invoices, under which businesses engaged in B2B transactions that exceed a specific threshold will be required to obtain an allocation number. According to this recent announcement, deduction of input tax will be allowed, even in the absence of an allocation number, until May 4, 2024 (previously March 31).

The clearance platform of ITA is fully operational since January 1, 2024, as originally planned, and invoice issuers who opt to request allocation numbers for their invoices, will be able to receive them.

For more details regarding Israel’s invoicing model, you can check our website here.

On 20th February the law introducing mandatory B2B e-invoicing in Belgium was published in the Official Gazette, available here.

This means that starting from 1 January 2026, VAT-registered taxpayers established in Belgium will be required to issue and receive structured e-invoices, while non-established foreign taxpayers with a VAT-registration in Belgium will be required to receive e-invoices.

Invoices will be sent in the structured format, following the European standard. The Peppol 4-corner model will be the default system, although taxpayers will be able to mutually agree to use any other system provided it meets the European Standard.

Belgium is currently awaiting the derogatory decision from the EU Commission, to be exempted from certain articles from the EU VAT Directive, similar derogations were already granted e.g. Poland, Romania, and Germany.

Check our blog for more information: Belgium Steps Closer to Mandatory E-Invoicing | Sovos.

On Friday, February 16th, the Polish Ministry of Finance (MoF) conducted its first two meetings as part of a series of consultations with businesses regarding KSeF, in which Sovos has actively participated.

The sessions addressed topics related to the security and performance of the KSeF system, as well as the impact of B2C transactions within this framework.

Furthermore, the MoF provided a projected timeline as follows:

The MoF assured that the start of public consultation does not imply a reset in the work regarding legislative and functional aspects of the KSeF system, and informed it has no plans to introduce changes to the schema FA(2). Rather, the MoF recognizes the investment of time and effort made by taxpayers in integrating with KSeF, which will be recognized.

The General Directorate of Public Finances (DGFiP) has shared new details on the upcoming French Continuous Transaction Controls (CTC) mandate from the Communauté des Relais meeting on 16 February 2024.

The implementation of the French CTC mandate is scheduled for September 2026. From this date, all businesses must be able to receive electronic invoices. Concurrently, large and medium-sized enterprises will be required to issue electronic invoices and report their transaction and payment data.

Details disclosed by DGFiP in the recent meeting include:

Information regarding participation and procedures for the Pilot Phase will be communicated during the next meeting of the Communauté des Relais in the second quarter of 2024.

The Ministry of Finance of the United Arab Emirates (MoF) has revealed its plans for previously announced E-Billing System, on 14 February 2024.

The MoF is initiating a regime that couples CTC Reporting with an e-invoicing mandate.

This mandate employs a Decentralized Continuous Transactions Control and Exchange (DCTCE) five corner model. This framework facilitates the movement of electronic invoices between the service providers of trading entities, where only certified service providers are authorized to transmit this data to a centralized platform managed by the Tax Authority.

UAE’s mandate does not implement any type of clearance system. Service providers of trading parties will exchange the e-invoice without a validation or intervention from the Tax Authority.

Initially, the mandate will encompass B2B and B2G transactions, with the potential inclusion of B2C transactions in future considerations.

Furthermore, the UAE will establish its own Peppol Authority and leverage Peppol PINT as format, similar to other non-EU Peppol jurisdictions.

The announced timeline for the regulatory process is as follows:

With this mandate, the UAE becomes to the third CTC jurisdictions in the Gulf region, joining Saudi Arabia and Israel. Considering that each of these countries is implementing different type of frameworks, working with a professional service provider that supports these countries is essential for staying on top of compliance requirements. For more details, you can visit our blogs dedicated to Saudi Arabia and Israel.

Liechtenstein is one of many countries with Insurance Premium Tax (IPT) requirements, specifically the Swiss Stamp Duty and Liechtenstein Insurance Levy.

This blog provides an overview of IPT in Liechtenstein to help insurance companies remain compliant.

What kind of taxes are applicable in Liechtenstein on insurance premium amounts?

In Liechtenstein, there are two types of taxes that apply to premium amounts received by insurance companies:

  1. Swiss Stamp Duty (CHSD)
  2. Liechtenstein Insurance Levy (LIL)

These taxes complement each other. LIL is only applicable if CHSD is not applicable.

Swiss Stamp Duty is applicable in Liechtenstein based on Customs Union Treaty of March 29, 1923, which regulates the federal rules of stamp duties. Liechtenstein levy on Insurance premium amounts only applies if the Swiss stamp legislation does not apply.

It is necessary to highlight that Liechtenstein is a member of the EEA. As a result, the Location of Risk provisions outlined in the Solvency II Directive apply to LIL.

Therefore, to determine whether a premium amount triggers LIL, the rules of the referred Directive should be applied. This is not the case for Swiss Stamp Duty.

Premium payments made by Liechtenstein resident policyholders and/or to insurance companies based in Liechtenstein are generally subject to Swiss Stamp Duty.

What are the tax rates in Liechtenstein?

Premiums on non-life insurance policies are taxable at the rate of 5% and life policies at a rate of 2.5%, unless one of the exemptions listed in the regulations apply. These rates and exemptions apply to both CHSD and LIL.

Examples  of exemptions include:

What is the basis of a CHSD and LIL calculation in Liechtenstein?

For the Liechtenstein Insurance Levy, the taxable basis is the premium payments based on an insurance relationship created by an insurance policy where the location of risk is deemed to be in Liechtenstein.

Whereas, for the Swiss Stamp Duty, the taxable basis is the premium payments for insurance:

  1. based on a domestic portfolio of a domestic Liechtenstein insurer
  2. that are paid by a domestic policyholder having an insurance contract with a foreign insurer

What are the CHSD and LIL filing and payment frequencies in Liechtenstein?

CHSD is filed on a quarterly and paid alongside the submission of the tax return. On the other hand, LIL is due biannually.

Each return is due within 30 days following the last day of the reporting period.

What are the penalties and interest for CHSD and LIL in Liechtenstein?

In case of late payment, a default interest should be paid on the amounts paid late. The interest rate is determined by the Swiss Federal Department of Finance.

What are the challenges for Insurance Premium Tax in Liechtenstein?

The main challenge is to determine which tax is due, CHSD or LIL. Secondly, it is challenging to determine whether the premium amount and the risk covered are exempt from taxation. The list of exemptions is long.

If LIL is due, these returns can only be filed by a fiscal representative based in Liechtenstein. It can be challenging to find one locally.

Want to learn more about Insurance Premium Tax?

Read more about IPT in general here: IPT Guide

Find your solution: Complete IPT Compliance for Insurers

Questions on location of risk? Download our Location of Risk Rules eBook

Want help for IPT in Liechtenstein?

Contact our team of experts today.

The Inland Revenue Board of Malaysia (IRBM) has just released the long-awaited Software Development Kit, which includes relevant technical documentation for the CTC mandate to be implemented, starting in August of 2024.

According to the IRBM, the e-Invoice Software Development Kit is a collection of tools, libraries, and resources providing a set of functionalities, Application Programming Interfaces (APIs), and development guidelines to assist businesses in integrating their existing system to the MyInvois System via API.

Alongside the Software Development Kit, a new version of the e-invoicing guidelines (version 2.2.) and e-invoicing specific guidelines have been released as well.

Pursuant to the Ministerial Decree published in Official Gazette No. 30 on February 6, 2024, the local consumption tax rates for Campione d’Italia (imposta locale sul consumo di Campione d’Italia, ILCCI) are increasing in conjunction with Swiss VAT rate increases for January 1, 2024. The standard ILCCI rate increases to 8.1% (previously 7.7%), and the reduced rates increase to 3.8% (previously 3.7%) and 2.6% (previously 2.5%).

The Decree can be found here (in Italian).

On February 2nd, the Minister of Finance (MoF) held a meeting with business representatives to discuss next steps regarding implementation of mandatory e-invoicing through KSeF.

During the meeting, several key assurances and plans were outlined by the MoF:

The link to the official news is available here.

To explore more about the upcoming changes concerning mandatory KSeF in Poland, visit our blog.

At SAPinsider Vegas 2024, you’ll connect with global leaders, practitioners, partners, and thought leaders to get inside the issues and trends that matter most to you – and your organization. Check out the opportunities below to learn how you can leverage your S/4HANA migration to modernize your approach to compliance.

 

Demo Session: Streamline Indirect Tax Compliance with Sovos’ Global Platform
Tuesday, March 19, 3:30 pm – 3:50 pm in Theater 2

Sovos has partnered with SAP for 20 years and holds certifications for the R/3, ECC and S/4HANA platforms. However, there is always room for improvement. This session will run through the enhancements that have been made to our SAP adaptor, as well as new tools that Sovos clients can utilize.

We will cover:

Client Case Study: Why Tax Needs a Seat at the Table
Wednesday, March 20, 1:10 pm – 1:50 pm in Monet 3

When substantial changes are being made at an organization, the implications for their tax compliance can often be forgotten. Sovos client, B. Braun Medical, experienced this but are now seeing the benefits of involving tax in these conversations. Join this session for more on their experience with Sovos and SAP and the importance of involving tax early in decision making.

This session will cover:

Transforming Tax Compliance for Global SAP Organizations
Wednesday, March 20, 3:30 pm – 4:10 pm in Bellagio 4

As your business grows and evolves, especially in times of rapid and dynamic regulatory and tech change, maintaining compliance can create a state of uncertainty. Compliance is increasingly real-time, always on and as much an IT challenge as it is a tax challenge.

To keep up with this, your tax compliance strategy needs to evolve as well. Learn more about the best ways to stay ahead rapid regulatory changes and how you can prepare your business for the future in this session.

Ready to talk about a global compliance platform to compliment your SAP instance? Book an on-site, 1:1 meeting with the Sovos team to discuss your indirect tax needs.

Malaysia is implementing a CTC clearance model starting in August 2024 for large taxpayers undertaking commercial activities in the country. Following recent postponements of the mandate, the pilot phase set to start in January of 2024 has also been postponed and, until recently, no date had been communicated for its launch.

The Inland Revenue Board of Malaysia (IRBM) has now set the date for May for the pilot program to begin, and it has gathered 50 companies for this phase. The pilot is open for any company that wants to join on a voluntary basis.