The German Tax Authority (Bundestag) approved the “Law on the Modernisation of Insurance Tax Law and Amendment of Employment Law Regulations” at the end of last month. The law limits the IPT exemption currently available on personal insurance such as Health and Disability insurance. Going forward the tax exemption should only apply to insurance policies taken out by individuals and their relatives for their own benefit. It also clarifies the application of the reduced rate on marine insurance. Furthermore, it will become mandatory to submit IPT returns electronically.
The new law was due to be effective from July 2021, but has however been delayed by six months to 1 January 2022.
