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The Only Way Is Up For Insurance Tax Rates Globally
Last month’s 3.5% increase to the UK’s standard Insurance Premium Tax rate is just another example of IPT on the rise, with the insurance industry anticipating future rate hikes both in the EU and worldwide.
In their 10th anniversary briefing paper, IPT in the spotlight: past, present and future, TMF Group’s team of experts examine the IPT market in Europe and beyond over the past ten years, and consider what the next decade holds for the insurance industry.
Head of IPT and co-author of the paper, Paul Hampton said: “UK insurers (and insureds) enjoy one of the lowest IPT rates in Europe, even with the 1 November standard rate increase to 9.5%. This rise may not be the end, in Britain and beyond.”
In 2015 alone, insurance tax rates increased in European countries including Malta, Slovenia, Italy and the UK. In July 2015 in Greece, the default IPT rate rose overnight from 10% to 15%.
Mr Hampton continued: “There has been some speculation in the UK insurance industry of a possible long-term plan to bring the IPT rate in line with the VAT rate; we have already seen it happen in the Netherlands, where the IPT rate went up from 7.5% to 21% in less than a decade.
“Over the past 10 years we have seen a marked trend for EU countries to increase the taxes they levy on insurance, and there is no indication that this upward trend is abating.”
As insurance companies in emerging economies get increasingly involved in multinational business, and governments look to generate higher tax receipts whilst enforcing regulation more prescriptively, it is not unreasonable to anticipate increasing insurance tax rates across the globe.The challenge for insurers, brokers and insureds will be to navigate this complex tax environment, and remain compliant.
Celebrating 10 years of IPT services
This briefing paper has been developed to mark 10 years of TMF Group’s IPT service line, which has grown exponentially since its inception in 2005. Beginning as a small team of experts covering the UK, Ireland and Germanic countries, the IPT team now consists of a much larger, multi-lingual group of experts providing IPT compliance services across the EMEA market and beyond. With a focus on innovation and streamlining services through the use of technology, the IPT team have also developed IPT Quote, TMF Group’s market leading global insurance tax database and calculator. Our unique service offering for companies involved in the taxes associated with multi-national insurance programmes is strengthened by the global reach of TMF Group and its truly local approach.