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.

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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.
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