Location of Risk Rules
Navigating Location of Risk can be quite daunting. This ebook is your compass, helping you sail smoothly to IPT compliance. With use cases and examples to follow, this ebook will help you successfully navigate one of the more complex elements of insurance premium tax.
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Understand how to determine Location of Risk
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Minimise compliance risk
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Written by IPT experts
Navigate legal framework
Understand Location of Risk
Legal cases to learn from
What this ebook about Location of Risk covers
This ebook will help you navigate Location of Risk and the rules that apply in the 27 member countries of the European Union (EU), the European Economic Area (EEA) and the UK.
It guides you through the countries where the rules apply, the legal framework that prompted the rules, examples of the criteria used to determine Location of Risk, local implementations that differ from the norm and how premium allocation works in practice.
Geopolitical background
Legal framework
Solvency II Directive 2009/138/EC, Article 13(13) including examples of the four criteria to determine Location of Risk
Solvency II Directive 2009/138/EC, Article 157(1)
Local implementation of Location of Risk rules – Switzerland, Liechtenstein, United Kingdom and Germany
Key takeaways
Premium allocation
How Sovos can help
How to determine Location of Risk
Following the Solvency II Directive 2009/138/EC, Article 13(13) enables insurers to identify the correct Location of Risk. This directive, amongst other things, defines the four criteria to determine which territory the risk is deemed to be located in and where it should be taxed.
After identifying Location of Risk, Solvency II Directive 2009/138/EC, Article 157(1) outlines that the Member State can tax that premium.
Consider these three points when determining Location of Risk:
1
IPT is not harmonised
Consider local IPT law when determining Location of Risk
2
Risk determines the criterion
Assess the risk to know what criterion to use: e.g. property, vehicle, holiday or travel, other
3
Non-EU / EEA region
Local rules typically differ from EU/EEA Location of Risk rules
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