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27 November 2012

Insurance Insight: Spanish provinces introduce direct premium tax collection


Four Spanish provinces have exercised their autonomous right to collect taxes directly from insurers.

According to tax specialists Fiscal Reps, Navarra, Álava, Guipúzcoa and Vizcaya (the last three form part of the Basque region) are all demanding insurers that write both domestic and freedom of service business, to file a specific provincial insurance premium tax return and settle the relevant IPT directly with the province's tax department instead of national authorities in Madrid.

The location of risk rules for the provinces appear to be in accordance with Article 2 (d) of EU Second non-Life directive rules and IPT should be apportioned accordingly, Fiscal Reps said.

It is possible that other regions in Spain, such as Barcelona, will see this as an opportunity to demand such powers, though the current legislation only covers the four provinces mentioned above.

Fiscal Reps is in dialogue with the relevant tax authorities and has agreed a process to ensure that insurers comply with the IPT filling and settlement obligations in these provinces. This follows Fiscal Reps' recent staement that indirect tax changes will challenge insurers in 2013.

Full article



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