Italian Parafiscal Complexities

Hellen Msangya
June 3, 2020

This blog was last updated on July 8, 2020

Premium tax and parafiscal compliance for insurers authorised to operate under the Italian regime can be challenging. For the experienced, it may seem that each year brings a different obligation to be met with new requirements often being introduced. There are almost always links between an upcoming year’s reporting requirements and declarations made in previous years. For example, IPT prepayments, a uniform requirement for all insurers. And, there are other similar obligations that are specific to the class of business covered. This is especially true for insurers writing policies to cover risks of damage caused by motor vehicles, boats, and hunting activities.

Road Accident, and Hunting Accident Victims Funds

For these specific risks, insurance cover is compulsory however there are many variables that can cause the cover to be ineffective. For instance, the most common cases involve damages caused by uninsured vehicles and craft in circulation as well as cases in which an insurance undertaking is placed under compulsory liquidation at the time of the accident. To this end, CONSAP, (the General Agency for Italian National Insurance) set up two Funds (the Road Accident Victims Fund – RAVF; and the Hunting Accident Victims Fund – HAVF) aimed at paying compensation within the specific limits set up by compulsory insurance law. Insurers covering the above risks should register with CONSAP and meet biannual obligations to report and make contributions in line with the total taxable premiums collected.  

Provisional payments

Each year CONSAP circulates an article in which applicable rates are set for the payment due for the year. Interestingly, the rates published are those of the taxable basis (e.g. the portion of the insurance premium on which the contributions should apply). The contribution rate usually remains the same with the notable exception of the HAVF contribution where its rate doubled in 2018. Insurers writing business relative to the above risks should calculate the amount due based on the provided rates and make a provisional payment for the year before the end of January. CONSAP specifies that the premiums taken into consideration should be those declared for IPT in the closing financial statements.

Adjustments

As opposed to the quasi-linear IPT prepayment, the second obligation for both RAVF and HAVF contributions is an adjustment declaration due at the end of September each year. The adjustment process varies from the provisional one as they relate to different periods. The main difference is that the adjustment in September is for the previous year, while the provisional payment is for the current year. Any differences arising from the adjustment either lead to a reclaimable or a payable amount.

A common query regarding these contributions is where the burden of payment lies. The key point here is that neither contributions can be charged to the insured and are therefore both borne by the insurer. Any refunds due can be reclaimed from CONSAP.

Take Action

Keep up to date with the latest developments by subscribing to our blogs and following us on LinkedIn and Twitter. We also host regular webinars with our in-house specialists who are on hand to help.

Sign up for Email Updates

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

Author

Hellen Msangya

Compliance Services Representative, IPT. Hellen joined Sovos in 2017 bringing in experience in research on Economic and Statistical Research. Her current focus is in reporting and managing compliance issues with the Italian and San Marino Tax Authorities.
Share this post

dtc spirits new york
North America ShipCompliant
February 14, 2025
A New Era for DtC Spirits Shipping: How New York’s Market is Taking Shape

This blog was last updated on February 14, 2025 In the fall of 2024, New York became the latest state to open its doors to direct-to-consumer (DtC) spirits shipping, marking a significant milestone for the industry. As one of the most populous states with a thriving market for craft and high-end spirits, the shift was […]

North America Unclaimed Property
February 10, 2025
Delaware Announces 2025 VDA Invitation Dates

This blog was last updated on February 14, 2025 Mark your calendars – April 11, 2025 and August 15, 2025 are this year’s anticipated release dates for the Delaware’s Secretary of State (SOS) VDA program invitations. In the event that an organization receives an invitation to participate in the Voluntary Disclosure Agreement (VDA) program  , […]

North America Sales & Use Tax
February 6, 2025
The Tariff and Sales Tax Mishmash – Untying the Mess

This blog was last updated on February 14, 2025 Talk of tariffs dominates the current news cycle with some commentators suggesting that tariffs will spell disaster for our economy while others say the exact opposite. We’ve seen the stock market sometimes fluctuate as tariffs are announced but later suspended, leaving us to wonder whether an […]

retailer dtc wine shipping
North America ShipCompliant
February 6, 2025
Retailer DtC Wine Shipping: The Time Has Come

This blog was last updated on February 14, 2025 By Tom Wark, Executive Director, National Association of Wine Retailers We are often reminded by the media and those in the wine industry—as well as by wine enthusiasts—that the three-tier system of alcohol distribution in most states hinders consumer access to the expansive number of wines […]

Montana 1099-DA
North America Tax Information Reporting
February 5, 2025
State Filing Alert: Montana’s New 1099-DA Requirements for Crypto Brokers

This blog was last updated on February 5, 2025 Reporting digital asset transactions on Form 1099-DA just got a little more complicated. For 2025 transactions, crypto brokers that file Form 1099-DA with the IRS will be required to file the 1099-DA with the State of Montana. This makes Montana the first state to introduce a […]