The introduction of insurance premium taxes (IPT) by Hungary and Denmark confirms that European governments are targeting insurance for tax revenue.
According to Mike Stalley, founder and CEO of tax compliance consultancy FiscalReps, insurers need to tighten up their IPT compliance, warning that non-compliance could lead to financial penalties and reputational damage.
Speaking at the 2012 FiscalReps forum in Malta recently, Stalley said:
“Despite changes to insurance premium tax compliance requirements that were designed to simplify procedures by creating a level playing field, IPT remains a major challenge for insurers throughout the European Union,”
“Understanding and managing the complexity of IPT remains an increasingly important task for insurance professionals when transacting business across the EU. With insurance compulsory in many fields, and virtually essential in others, tax on premiums is becoming viewed as ‘easy money’ by revenue authorities in this difficult economic climate. Revenue authorities across Europe are becoming increasingly vigilant and, as a result, compliance failures are more likely to be spotted - and penalised.”
