This blog was last updated on August 10, 2026

Germany Insurance Premium Tax (IPT), known in German as Versicherungsteuer, is a key obligation for insurers writing business in Germany.

Governed by the Versicherungsteuergesetz (VersStG), Germany IPT applies to premiums collected on insurance contracts where the location of risk is in the country.

In addition to IPT, Germany also levies a separate Fire Brigade Tax (Feuerschutzsteuer, FBT) under the Feuerschutzsteuergesetz (FeuerschStG), creating a dual tax burden which is not unique within the European Union in cases where fire risks are covered by the insurance contracts.

For businesses (mainly insurance companies) that deal with these specific types of taxes, compliance requires careful consideration of the rules—which can be complicated and have undergone several updates in their regulation in recent years, including mandatory electronic filing.

This blog explores the rules governing Germany Insurance Premium Tax and Fire Brigade Tax, including applicable rates, tax liability, location of risk rules, exemptions, penalties, and compliance obligations.

• Germany IPT tax rates are typically 19% (the standard rate), but some specific risks have different rates
• Germany is one of the few EU jurisdictions that imposes a separate Fire Brigade Tax on fire insurance premiums
• Certain types of insurance are exempt from German Insurance Premium Tax, such as life insurance, certain health insurance and reinsurance
• The primary governing body responsible for administering German Insurance Premium Tax (IPT) and Fire Brigade Tax (FBT) is the Federal Central Tax Office (Bundeszentralamt für Steuern, or BZSt)
• While the German IPT is an insured borne tax i.e. the policyholder bears its cost, FBT is insurer borne tax. This treatment sometimes cases difficult situations especially when the risks are co-insured.

What Is German IPT (Insurance Premium Tax)?

Germany Insurance Premium Tax or Versicherungsteuer applies to premiums paid under insurance contracts where the location of risk is situated in Germany, in accordance with the VersStG and EU location of risk principles.

The taxable base is the gross premium paid by the policyholder, including any policy fees and ancillary charges forming part of the premium consideration.

The standard German IPT tax rate is 19%, but specific risks have different rates applied.

What Is German FBT (Fire Brigade Tax)?

The Fire Brigade Tax (Feuerschutzsteuer) is a distinct levy imposed on premiums for fire insurance in Germany. It is governed by the Feuerschutzsteuergesetz (FeuerschStG) and applies to premiums collected in respect of fire risks, primarily covering buildings, their contents, and certain other fire-exposed assets.

The FBT rate is 22%.

Who is Liable — Policyholder vs. Insurer

Germany Insurance Premium Tax (IPT) is borne by the policyholders but is calculated, collected and also reported and remitted to the tax authorities by the insurer (except for some special cases). This means that the economic burden of Germany IPT falls on the insured party. However, the insurer is legally obligated to collect this tax from the policyholder at the point of premium payment and to settle the collected tax to the relevant tax authority on the policyholder’s behalf.

This distinction has important practical implications:

• The insurer acts as a tax collection agent and bears primary responsibility for the correct calculation, collection, and timely payment of IPT
• If an insurer fails to collect IPT from the policyholder, the insurer remains liable to remit the tax regardless

Insurers are responsible for reporting, collecting and remitting IPT to the German tax authorities. Remaining compliant with complex IPT rates dependent on risk requires robust procedures to ensure accuracy and reduce errors that can result in large tax assessments, interest charges and penalties. Reforms to the German Insurance Tax Act have created uncertainty in relation to some global policies that cover non-EEA risks with German policyholders, whereby potential for double taxation could arise.

Policyholders need to be aware of the complexities of IPT in Germany tax as it is a charge passed on to the policyholder in addition to the premium by the insurers, so it directly affects the total cost of their coverage.

While the default rule places the obligation to collect and remit Germany Insurance Premium Tax on the insurer, there is an important exception where the liability shifts directly to the policyholder.

This occurs when the insurer is established outside the EU/EEA and has neither a German establishment nor an appointed German tax representative. In such cases, the policyholder becomes directly responsible for calculating, declaring, and paying the IPT to the German tax authorities, effectively stepping into the role ordinarily performed by the insurer.

This self-assessment obligation is a critical consideration for German corporates purchasing insurance from non-EEA insurers, as it places the compliance burden — including the risk of penalties for late or incorrect payment — squarely on the insured party rather than the insurer. Policyholders in this position must register with the relevant German tax authority and file returns on the same monthly cycle that would otherwise apply to the insurer.

On the other hand, Fire Brigade Tax (FBT) is an insurer borne tax. It is the burden of the insurer and cannot be charged to the policyholder.

Location of Risk Rules

“Location of risk” (LoR) is a concept which determines whether Germany has the right to tax an insurance premium.

The principal location of risk rules are as follows:

• Immovable property (buildings): The risk is located where the property is situated
• Vehicle Insurance: The country where the vehicle is registered is the location of risk.
• Travel Insurance: The risk lies with the country where the policyholder took out the policy (if the cover is for less than four months)
• Other Insurances: For risks that do not fall into the above categories, location of risk will be where the policyholder, if individual, has their habitual residence or if a legal entity where the establishment to which the policy relates is situated

Recent reforms have impacted policies where the policy covers non-EEA risks.  For example, if there is a German policyholder taken out a policy from an insurer (EU or EEA) that covers non-EEA risks, the premium attributable to the non-EEA risk may still be subject to German IPT.

What is the IPT and FBT rates and components in Germany?

The standard German IPT rate is 19%, and it applies to most insurance premiums, including general liability, property and livestock insurance. The standard FBT rate is 22%.

However, there are some other rates that apply in certain cases, such as

• Fire (buildings and contents) and business interruption insurance (includes a Fire Brigade Charge):
  In cases where fire is also covered, the components of Germany IPT tax are the Insurance Premium Tax itself, plus a possible additional charge such as Fire Brigade Tax (FBT) which is due on a property and fire insurance premiums. For example, for general fire insurance premium is split into IPT (60% of the premium at 19%) and FBT (40% of the premium at 22%).

• Marine hull insurance (if certain conditions is met): 3%
• Some accident policies (if certain conditions is met): 3.8%

The standard FBT rate is 22%. However, this is not imposed on the total premium amount but only on a dedicated proportion of it, for example in case of fire risks of buildings this rate is 40%, hence the effective FBT rate is 8.80%.

There are reduced rates as well. For residential buildings the effective rate is 2.660% which is 19% of 14% of the premium. Furthermore, for home contents insurance the effective rate is 2.850% which is 19% of 15% of the premium.

Exemptions

German Insurance Premium Tax and Fire Brigade Tax include a number of important exemptions. Understanding when these exemptions apply is essential for accurate Germany insurance tax compliance.

The key exemptions are:

• Life insurance: Premiums under life insurance contracts are exempt from IPT. This covers traditional life policies, annuities, and endowment policies
• Health and sickness insurance: Premiums for statutory and private health insurance are exempt from IPT, reflecting the social policy nature of these contracts
• Reinsurance: Premiums ceded under reinsurance contracts are exempt from both IPT and FBT, as the tax is already levied at the direct insurance level
• Goods transit insurance: Premiums for goods in international transit are exempt

Legal Basis

The legal basis for German Insurance Premium tax is the German Insurance Premium Tax Act (Versicherungsteuergesetz, or VersStG). This law, along with guidance from the Federal Ministry of Finance (Bundesfinanzministerium, or BMF), governs the taxation of insurance premiums for risks located in Germany.

The separate Fire Brigade Tax Act governs FBT (Feuerschutzsteuer) under the Feuerschutzsteuergesetz (FeuerschStG). 

What is the filing frequency and reporting requirements for IPT and FBT declarations in Germany?

Filing frequency is determined by the Insurance Premium Tax Act and the Fire Brigade Tax Act is based on the total IPT and FBT declared in the prior calendar year.

As the table above shows, it is possible that an insurer is liable to submit IPT returns monthly, but annual FBT returns should the IPT amount is above €6,000.00 while FBT is less than €400.00. For example, this is the case for an insurer, which mainly writes class 13, general liability insurance policies.

German IPT and FBT declaration and reporting requirement liability usually falls on the insurer. They are responsible for calculating, reporting and paying the owed IPT and FBT. The entity liable must declare and pay the due amount by the 15th day after the end of each self-assessment period (annually, quarterly or monthly).

Since 1 January 2022, all submissions are required to be sent electronically to the BZSt.

Updates on German IPT and FBT

Germany Insurance Premium Tax and Fire Brigade Tax have a long legislative history, with the Versicherungsteuergesetz tracing its origins to the early twentieth century. The current framework was substantially shaped in the post-war period and has been amended on multiple occasions to reflect changes in the insurance market, EU legislative developments, and fiscal policy.

Key milestones in the legislative development of Germany IPT and FBT include:

• 1922: Creation of IPT framework: creation of the federal insurance premium tax framework (Versicherungsteuergesetz, VersStG).
• 1996: Consolidated text and implementing rules: New official consolidated version of the Insurance Tax Act, together with the Implementing Ordinance, clarified location of risk, scope and procedural aspects.
• 2010: Administrative centralisation: centralisation of the administration took place at the Federal Central Tax Office.
• 2016: Regulatory alignment: Transposition of the Solvency II Directive (2009/138/EC) and alignment of location of risk definitions.
• 2020: Modernisation of Insurance Tax Law / Tax reform: Amendments affecting allocation/location of risk, cross‑border situations and certain exemptions.
• 2021: The Federal Ministry of Finance in Germany publish various circulars in response to a Fiscal Court judgment on the rules of taxation of guarantee commitments (made effective 1 January 2023)
• 2022: Mandatory Electronic Filing: All tax returns under the German Insurance Tax and Fire Brigade Tax Acts are now subject to mandatory electronic format submission.

Double taxation in Germany for a German policyholder

Double taxation is possible if a policy for the German policyholder includes non-EEA countries. German IPT is then due on the premium allocated to Germany and to premiums allocated to non-EEA countries. This could be in addition to any applicable premium taxes due in non-EEA countries.

However, if the policy includes other EEA countries, then German IPT cannot be charged on premiums allocated in these EEA countries.

What are the IPT challenges in Germany?

The main IPT challenges in Germany are the complex “location of risk” rules, double taxation potential on global policies and varying tax rates and exemptions for specific insurance types.

The double taxation risk arises from the reform of the German Insurance Tax Act, which stipulates that German IPT can be due on premiums for any German policyholder that covers risks in non-EEA countries. This means that double taxation could apply if premium taxes are also applicable in those territories.

Varying tax rates and exemptions pose a challenge for insurers and policyholders, as they must accurately apply different IPT and FPT rates based on the type of insured risk.

These challenges require careful consideration of the regulations detailed in the German Insurance Tax and Fire Brigade Tax Acts to ensure compliance. 

How Sovos Helps with German IPT Compliance

Sovos’ IPT Managed Services ensures your business complies with the latest Insurance Premium Tax requirements in Germany.

Need to ensure compliance with the latest German IPT regulations? A managed service provider like Sovos can help. Get in touch with our tax experts today.

Germany IPT FAQ:

Are life and sickness policies exempt from German IPT?

Yes, generally. Life insurance premiums remain fully exempt. However, for certain personal insurance lines — such as sickness, occupational disability, and reduced earning capacity — the exemption has been restricted since 1 January 2022. It now applies only where the policy is taken out for the direct benefit of the person at risk or their close family members. Corporate entities insuring their own financial exposure under such policies are no longer eligible for the exemption.

Which insurance premiums are subject to German IPT?

Most insurance premiums with a location of risk in Germany are subject to the standard Germany Insurance Premium Tax rate of 19%. This includes motor insurance, liability insurance, travel insurance, pet insurance, home contents insurance, and most personal accident policies.

For fire insurance, both IPT and FBT apply, but to different portions of the premium rather than to the full premium amount. IPT at 19% applies to 60% of the premium (an effective rate of 13.2%), while FBT at 22% applies to the remaining 40% (an effective rate of 8.8%).

Guarantees and extended warranties provided alongside goods or services are generally treated as insurance benefits subject to IPT rather than VAT. Following guidance from the Ministry of Finance, the rules — initially linked to the motor vehicle sector — were expanded to apply across all industries.

As a result, paid guarantees and extended warranties sold as additional products have been subject to IPT at 19% since January 2023, impacting sectors such as electrical goods and household appliances.

Certain personal insurance lines — such as occupational disability cover taken out by a corporate entity for its own financial protection — are also subject to IPT following a restriction of the exemption effective 1 January 2022. A number of classes, including life insurance, sickness insurance, and reinsurance, remain exempt.

Can German IPT cause double taxation?

Yes, in certain circumstances. Where a policyholder is established in Germany and holds a global insurance policy that covers risks located in non-EEA countries, German IPT may apply to the premium attributable to those non-EEA risks in addition to any insurance taxes already due in the countries where those risks are located.

This double taxation risk arises regardless of where the insurer is domiciled and applies across all classes of business.

Importantly, the risk does not extend to premiums allocated to other EEA countries — German IPT cannot be charged on those elements. Where a policy covers a mix of EEA and non-EEA risks, German IPT applies to the German element and to the full non-EEA element, making premium apportionment a critical compliance step.

What are the current IPT rates in Germany?

The standard Germany Insurance Premium Tax rate is 19%, applying to most non-life insurance classes including motor, liability, property, and standard accident insurance. Fire insurance is subject to IPT and FBT, split between IPT at 19% applied to 60% of the premium (effective 13.2%) and FBT at 22% applied to the remaining 40% (effective 8.8%). Marine hull insurance for seagoing vessels is subject to a reduced rate of 3%, if certain conditions are met, similarly to accident insurance, which can be subject to a reduced rate of 3.8%.

Are there exemptions for certain types of insurance?

Yes. A number of insurance classes are exempt from German IPT. The most commercially significant exemptions are life insurance, health and sickness insurance (subject to the restriction from 1 January 2022), reinsurance, and marine cargo insurance for goods in international transit.

Additional exemptions apply to statutory social insurance schemes, occupational pension insurance, wage equalisation fund insurance, legal protection insurance provided by trade unions and employers’ organisations to their members, and insurance policies taken out by diplomatic missions and consulates (subject to reciprocity).

What is the filing frequency for German IPT declarations?

The filing frequency for German IPT declaration depends on the amount of the previous year’s IPT and FBT liabilities. Filing frequency in 2026 is as follows:

Is electronic filing mandatory for German IPT?

Yes, electronic submission and filing have been mandatory for German IPT and FBT since 1 January 2022.