German Insurance Premium Tax (IPT)
Working through the International Group, and with specialist legal support, IG clubs continue to monitor the developing situation in Germany as regards Insurance Premium Tax on clubs’ business.
Relying on a decision of the Cologne Fiscal Court in October 2017, the German tax authorities continue to assert that IPT (charged at 19% on the whole premium) is payable where co-assureds are domiciled in Germany, even where the insured vessel is not German-registered or the Member is domiciled elsewhere in the EU.
Following a recent decision of the German Federal Tax Court, it is likely that the Cologne decision will be challenged, on the basis amongst others that in many instances this interpretation conflicts with EU tax harmonisation regulations designed to prevent double taxation. A definitive decision is not expected however before 2020 at the earliest.
Pending the outcome, IG clubs do not propose to charge or apportion IPT to German domiciled co-assureds. However, it remains a risk that the October 2017 decision will be allowed to stand; or that tax authorities will seek to enforce the existing interpretation before the October 2017 interpretation can be reversed. In those circumstances, clubs may be obliged to collect outstanding IPT retrospectively in respect of policies with co-assureds domiciled in Germany.
Members requiring more information should contact UK Club's Head of Compliance, Paul Knight (E firstname.lastname@example.org)
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The FATCA form has been updated as of July 2017. You can find the new version attached above.