On 14 June 2023, the government bill Tax Amendment Act 2023 – AbgÄG 2023 was approved amending The Insurance Tax Act 1953.
The amendment enables third country domiciled insurance companies to register and settle Insurance Premium Tax (IPT) liabilities directly with the Austrian tax authority. Previously it was the responsibility of the policyholder or an authorised representative to settle the taxes due in Austria if the insurer has neither domiciled nor has an authorised representative in a EU or EEA country.
This change is especially significant for insurers in the United Kingdom, because when the UK left the EU, insurance companies from the United Kingdom wanted to continue directly paying IPT in Austria, but this was not allowed by law.
It should be highlighted that this is only an option, instead of a requirement, for third-country insurers. If the insurer does not choose this option, it must notify:
- The policyholder immediately, i.e. usually when the policy is incepted or, in the case of existing insurance relationships, when requesting for the payment of the insurance premium, and
- The Austrian Tax Office by 31 March of the following year.
According to the explanatory notes of this law there will be a decree which will provide details about the content of the information and how this should be sent.
The regulation will go into effect on 1 January 2024. As of this date the third country insurer has the option to pay IPT directly to the Austrian Tax office, regardless of whether the premium is derived from a newly incepted or an already existing policy.
