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)
You may also be interested in:
Circular 17/20: US Oil Pollution California - Increased criminal penalties for oil spill related offences
Circular 17/20: US Oil Pollution California - Increased criminal penalties for oil spill related offences.
Since 2010, considerable sanctions’ activity has been directed at shipping and its supporting industries reflecting the fact that 90% of world trade involves the carriage of goods by sea.
IG Letters of Indemnity
Members are often asked to accept letters of indemnity (LOIs) from their shippers or charterers in return for the delivery of cargo without presentation of original bills of lading, the delivery of cargo at a port other than that named in the bill of lading (or both) and in various other circumstances.
The entry into force of the 2014 amendments to MLC on 18 January 2017 raised a number of complex and novel questions.