Meet the Expert is our series of blogs where we share more about the team behind our innovative software and managed services.As a global organisation with indirect tax experts across all regions, our dedicated team is often the first to know about new regulatory changes and the latest developments on tax regimes worldwide to support you in your tax compliance.
We spoke to Khaled Cherif, senior client representative here at Sovos to discover more about Insurance Premium Tax (IPT) and, in particular, the complexities of France and the French overseas territories.
Can you tell me about your role and what it involves?
I joined Sovos as part of the IPT team in June 2017. My role is senior client representative and I mostly work with our French and Italian clients, which is around 54 organisations.
I am the first point of contact so my role along with the rest of the team is to provide clients with all the assistance that they require, including helping them with filing their liabilities and ensuring they are compliant with the relevant regulations.
Can you explain IPT in France and what is particularly complex about the country’s IPT regulation and requirements?
IPT in France is quite complex as there are many parafiscal charges that can apply to insurance premiums. There are also multiple IPT rates depending on the type of risk being covered. This can range from 7% IPT rate to as high as 30%. As well as the different IPT rates there are also 10 parafiscal charges that could be due on insurance premiums and again all with varying rates.
There are also French overseas territories to be considered. There are two groups of French overseas territories, the Départements and Régions d’Outre-Mer (DROMs), and Collectivités d’Outre-Mer (COMs).
What top tips do you have for insurers that have IPT obligations in France and other EU countries?
It’s important to understand the differences in IPT requirements with the French overseas territories.
DROMs (French Guyana, Guadeloupe, Martinique, Mayotte, and Reunion) are treated the same as mainland France for premium tax purposes. Premiums covering risks located in these territories should be declared in the same way, except for Guyana and Mayotte where the IPT rates applicable are reduced by half.
For COMs the local tax authority for the territory can levy taxes on insurance premiums. Most have set up their own IPT regimes, often requiring insurers to appoint a fiscal representative. In some COMs territories the tax ID issued for Mainland France can be used.
As many French and international organisations have subsidiaries in overseas French territories it’s important to understand how the different IPT rates and filings affect compliance. Not being based in the territory where IPT needs to be filed can make things complicated, so working with local partners or representatives can ease the burden.
How can Sovos help insurers?
Sovos has a team with global IPT expertise, meaning we can help organisations understand their IPT requirements wherever they operate, including in France and the French Overseas Territories.
Sovos has in-depth knowledge of local requirements, laws and regulations as well as local partners and representatives to assist with IPT requirements.