Transactional Trends: The Latest Developments in IPT Reporting

Rahul Lawlor
August 3, 2022

An increasing insurance premium tax (IPT) trend is using transactional level information in various returns and reports. Preparation and education are key to ensuring details are being captured on an ongoing basis rather than at the last moment. Furthermore, in some cases where legacy systems are being utilised and don’t have the capability to capture all required fields, a software update may be required. All relevant parties in the data supply chain should educate themselves on the importance of collecting the details to avoid the often painstaking and time-consuming exercise of going back to the policyholder to collect the required information.

Many businesses initiated this trend because of the changes to the Consorcio de Compensación de Seguros (CCS) reporting system in 2019. However, this is not always the case as some countries have had transactional submission in place for some time. Two such examples would be Cyprus and Malta. For the former, Policy Number, Class of Business, Inception/Expiry Date, Premium and Tax Amount are required per policy. The same fields are required for the latter bar Inception/Expiry Dates. We rarely experience any difficulties for insurers collecting this information, as these are common fields often being collected at the source.

Italian transactional trends

Whilst this may surprise some, Italy is another country where transactional level information is required to be recorded. The main difference here is that these details aren’t required for ongoing tax submissions but rather in the form of IPT books which must be regularly maintained and contain the transactional information for the preceding ten years. You can find more about the required details here.

The IPT books are mandatory for successful prepayment transfer following a Part VII portfolio transfer, general prepayment reclaims and historicals. Transactional details are also required for the Claims Report and Contract & Premium Report.

Spanish transactional trends

The changes in CCS submission brought the trend of transactional submission to the forefront of insurers’ thinking. A mandatory field for successful submission is the postcode, which many insurers weren’t capturing at the time. To help insurers with this change, there was a six-month transitional period where insurers could submit policies without the postcode. However, this field then became mandatory and the requirement was that the preceding six months of reports would need updating.

Greek transactional trends

The introduction of the Greek Annual Report in 2019 brought another layer of complexity for insurers. The main issue was the requirement for the VAT/tax registration number to be populated. Where it was impossible to collect, insurers sometimes opted to submit incomplete reports. To date, we haven’t experienced pushback from the tax authority for omitting this detail, but we cannot guarantee this will continue to be the case.

Portuguese transactional trends

The most recent change has been to Portuguese Stamp Duty submissions. This change brought elements of the Greek Annual Report and the CCS changes together, in the sense that the geographical area required population (Azores, Madeira, Mainland) and the tax ID of the policyholder were required. Unlike in Greece, there was no option of submitting incomplete reports; if all necessary details were not populated, the insurer couldn’t pay the tax.

The trend towards transaction reporting will increase

The above list is by no means exhaustive but gives a good idea of the exponential complexity facing insurers for ongoing compliance. Simply put, the insurer must have agile systems to deal with any potential changes. We believe that more countries will implement transactional reports in the coming years, so it would be prudent to set up certain controls now to help prepare and ease the burden later.

As the world of IPT compliance is so fragmented across territories, keeping abreast of changes in reporting requirements can be challenging. Our team of experts can guide you through the details and ensure you’re on the right compliance path.

Take Action

Need help ensuring your IPT compliance? Get in touch with Sovos’ team of experts to discover the benefits of a managed service provider.

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

EMEA VAT & Fiscal Reporting
September 18, 2023
Intrastat Thresholds: Current Exemption Values

Intrastat thresholds are value thresholds which decide if companies in an EU Member State qualify to file a return to tax authorities, based on their intra-community trading. These thresholds change annually, prompting businesses to conduct an annual recalculation to know their obligations. This blog contains all the Intrastat reporting thresholds for 2023, as well as […]

EMEA VAT & Fiscal Reporting
September 18, 2023
Intrastat Guide: Reporting, Numbers, Thresholds

Intrastat is an obligation created in 1993 that applies to certain businesses that trade internationally in the European Union. Specifically, it relates to the movement of goods – arrivals and dispatches – across EU Member States. The requirements of Intrastat remain similar across the EU, though certain Member States have implemented rules differently. As a […]

EMEA VAT & Fiscal Reporting
August 22, 2023
OSS VAT Returns: Deadlines, Exclusions and Penalties

Sovos’ recent observations of audits by EU Tax Authorities are that Tax Officers are paying more attention to the contents of One Stop Shop (OSS) VAT Returns. They have challenged, and even excluded, companies from this optional scheme. OSS VAT returns must contain details of supplies made to customers in each Member State of consumption […]

E-Invoicing Compliance Latin America
August 17, 2023
Chile: Changes in the Electronic Ticket for Sales and Services

The Chilean Internal Revenue Service (SII) recently published version 4.00 of the document describing the format of electronic tickets for Sales and Services. The electronic ticket (or Boleta Electrónica) is an electronic receipt issued for the sale of goods or services to individuals, consumers or end users. The document includes basic information about the transaction, […]

E-Invoicing Compliance EMEA
August 10, 2023
France: B2B E-Invoicing Mandate Postponed

Update: 15 September 2023 In a recent meeting of the Communauté des Relais, the tax authority released additional details surrounding the previously communicated postponement of the B2B e-invoicing mandate in France. This delay is a result of the tax authority listening to feedback from French businesses who have struggled to meet the original timeline. It’s […]