Insurance premium tax services

As the global shift from direct to indirect taxation continues, an increasing number of countries have introduced or increased insurance premium tax (IPT) and parafiscal charges. This can create complexity for global insurers or captives writing international general insurance programs in multiple territories. EY teams can help.

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What EY can do for you

In many countries, insurers writing insurance coverage outside their country of establishment need to comply with tax legislation in the country where the risk is located. IPT is constantly changing and provides challenges such as varying taxes, different rates and confusing deadlines.

Backed by the global EY network and provided through a team of IPT professionals, our service supports you to help manage the indirect taxation of premiums correctly and efficiently.

In order to deliver efficiently on cross-border IPT queries, EY teams have compiled a database of taxes and parafiscal charges levied on insurance products. This database can be accessed through the EY IPT Analyzer.

The EY IPT service network covers advisory, compliance and technology services on a global scale.

IPT advisory services

EY teams provide IPT advisory services on issues such as location of risk rules, premium apportionment and global rates related to all transactional taxes on premiums (IPT, VAT, parafiscal charges or withholding tax).

EY advisory services can help you answer these questions:

  • What taxes, or other charges and levies, apply in each jurisdiction?
  • What are the relevant tax rates on a certain line of business?
  • Who bears the cost of the tax?
  • Who is responsible for settling the taxes?
  • In which jurisdiction (jurisdictions) should the premium be subject to tax?
  • What are the compliance/tax registration requirements in every risk jurisdiction?

The EY IPT advisory services also focus on helping companies improve the effectiveness of the tax function and the implementation of tax processes and software tools. For example: EY professionals can help improve your data quality so that it is sufficient for IPT reporting or advise how to manage and track your obligations across multiple jurisdictions.

Apart from providing regular advice to insurers, EY teams also perform reviews of insurance programs for multinational policyholders, as in many countries they are liable for IPT.

We can also assess your IPT function and provide relevant insights and recommendations on sustainable performance improvement for processes, technology, data and people.

IPT compliance services

EY teams offer a broad range of compliance products and can assist with the settlement of premium taxes in all European Economic Area (EEA) jurisdictions and many more across the globe. EY professionals work with you to develop a standardized and streamlined method of data collection to reduce the impact on internal resources.

EY IPT compliance services
  • Tax registration with tax authorities
  • Filing of retrospective IPT returns
  • Periodic IPT returns, all managed by a single point-of-contact
  • Periodic returns for parafiscal charges, levies, etc.
  • Working on tax audits from tax authorities
  • Applying for IPT credits

IPT technology services

Utilizing the EY Global IPT Knowledge Database which covers more than 700 jurisdictions (countries, states, provinces and overseas territories), EY teams have created a compliance tool composed of three modules to assist you with IPT determination.

1.     Interactive IPT Tracker

This is an online IPT reference tool, showing taxes, rates and other compliance information as well as changes in more than 700 jurisdictions.

2.     IPT Risk Locator

A decision tree modeler which uses a sequence of questions and answers about the insured interest to help determine the location of risk for tax purposes. The IPT Risk Locator is used to help understand which territory and IPT rates and restrictions should be applied to a policy.

3.     IPT Calculation Tool

A tool to generate a tax schedule for a global insurance program. The calculation tool breaks down the schedule by multiple insurers, jurisdictions, insurance classes and more.

All modules can be used/subscribed to individually, but they are also linked. For example, a result from the Risk Locator can be taken to the Calculation Tool for creating a tax schedule.

The IPT Tracker can be deployed to multiple users within a business (e.g. across Tax, Shared Services, IT) and can be incorporated as part of your overall IPT knowledge library to be accessed quickly across the organization.

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