Insurance Premium Tax Prepayments: Austria

Rahul Lawlor
September 13, 2022

In the next edition of our series of blogs in Insurance Premium Tax (IPT) prepayments, we look at a less familiar regime to many, the Austrian IPT Prepayment.

IPT prepayments in Austria

Those who are well versed in the IPT sphere will be perplexed at this blog, as they most likely will never have paid a prepayment in Austria.

This is because the prepayment is only due in the event of the November tax period being paid late. Due to the elongated deadline of Austrian IPT and Fire Brigade Tax (FBT) this rarely happens in practice. As a reminder, the tax payment in Austria must be made by the 15th day (due date) of the second consecutive month (i.e January 2022 period due 15 March 2022).

But what if the November deadline isn’t paid in full by the 15 December? A special advance payment of 1/12 of the sum of the calculated tax amounts of the last 12 tax return periods must be made. This special advance payment is credited against a subsequent self-calculation for the declaration period of November.

What about penalties in Austria?

With respect to IPT, FBT and Vehicle Insurance Tax (VIT), the rules are as follows:

  • Late filing penalty is up to 10% per annum of the declared tax unless the delay is deemed ‘excusable’. If the late filing penalty is below €50.00 then a penalty shouldn’t be imposed.
  • Late payment penalty is 2% per annum of the unpaid tax amount.  If the late payment penalty is below €50.00 then a penalty shouldn’t be imposed.
  • If the late filing/payment penalty isn’t paid within the penalty payment deadline, the tax authority may increase the penalty further.

Austria’s compliance requirements

Insurers should be aware that whilst tax payments are paid monthly, the return is due on an annual basis, the deadline being 30 April. The return(s) includes the tax ID, name of the insurer, tax amount on a per month basis, and the amount paid in tax for the year in question thus far.

For FBT liabilities the amount is split evenly between the insured and the insurer. So, for a risk with 100% fire portion and €100.00 premium, in addition to the €11.00 IPT amount the insured would also pay €4.00 FBT. The remaining €4.00 of FBT would be from the insurer.

From an exemptions perspective there is quite an exhaustive list in Austria. Some of which are export credit, cross-border cargo, reinsurance, and livestock (If the insured amount doesn’t exceed €3.650, as well as insurance of livestock with a small livestock insurance association).

Keeping abreast of changes in IPT compliance requirements in Austria and across the EU can be challenging. Our team of experts can guide you through the details and ensure you are on the right compliance path.

Sign up for Email Updates

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

Author

Rahul Lawlor

Rahul is a compliance services manager, responsible for overseeing the delivery of indirect tax compliance services for a portfolio of global insurers. He joined Sovos in 2016 after completing a Financial Maths degree from the University of Surrey.
Share This Post

North America ShipCompliant
September 29, 2022
5 Essential Questions to Ask When Searching for a Compliance Partner

Managing beverage alcohol compliance and tax in a rapidly evolving regulatory environment takes expertise and a relentless attention to detail. Odds are, you didn’t get into the industry to spend countless hours each week pouring over mandate changes, tax laws and regulatory updates. Partnering with a compliance software company is an easy way to mitigate […]

E-Invoicing Compliance EMEA
September 27, 2022
Billing SAF-T in Portugal: A New Obligation for Non-Residents

Portugal’s state budget entered into force on 27 June 2022 after protracted negotiations. The budget contained an interesting provision: the obligation to present invoice details to the tax authorities was extended to all VAT-registered taxpayers including non-resident taxpayers, who had long been exempt from this obligation. VAT-registered non-residents now have three options for communicating invoice […]

EMEA IPT
September 27, 2022
Understanding Insurance Premium Tax Prepayments in Italy

Continuing our IPT prepayment series, we take a look at Italy’s requirements. In previous articles we have looked at Belgium, Austria, and Hungary. All insurers authorised to write business under the Italian regime have a legal obligation to make an advance annual payment for the following year. What is the prepayment rate in Italy? The […]

EMEA VAT & Fiscal Reporting
September 23, 2022
Virtual Events and the Risk of Double Taxation

When organising a virtual event, it’s important to determine how this supply will be treated for VAT purposes. We have previously discussed VAT rules and place of supply for virtual events, this blog will discuss the potential future changes to the VAT position for EU Member States. Current VAT position for virtual events in Europe […]

Brazil E-Invoicing Compliance EMEA
September 22, 2022
Brazil Introduces National Standard for the Service e-Invoice

Brazil is known for its highly complex continuous transaction controls (CTC) e-invoicing system. As well as keeping up with daily legislative changes in its 26 states and the Federal District, the country has over 5,000 municipalities with different standards for e-invoicing. The tax levied on consumption of services (ISSQN – Imposto Sobre Serviços de Qualquer […]