Airmic gives cautious welcome to LIIBA insurance tax initiative |
|
5 October 2010 LIIBA (the London and International Insurance Brokers' Association) is teaming up with a company that specialises in insurance tax to help its members calculate tax payable on policies around the world on a territory-by-territory basis. Click here to read LIIBA's annoucement on IPT Quote, tax calculation tool LIIBA has selected TMF IPT Quote as its prefered tool for dealing with one of the biggest concerns of buyers of global insurance and reinsurance programmes - how to ensure compliance with premium tax laws on an international basis. Airmic, which has often expressed concern at the complex web of tax laws in force around the world, has welcomed the initiative in principle. It is however, waiting to examine IPT Quote in detail before commiting itself. The amount of Insurance Premium Tax, VAT, GST and US Surplus lines and other taxes payable on premiums varies from jurisdiction to jurisdiction and class to class and, in some cases like the United States, there are some substantial internal variations. There are also differences over who should pay the tax - the buyer, broker or underwriter. Since some rules are hard to interpret and liable to change without much notice, it is a huge challenge for brokers, insurers and their clients to be sure they have met their respective tax obligations at all times. IPT Quote is an on-line calculation tool covering over 200 countries created by TMF VAT & IPT Services, a company with offices in 67 countries specialising in tax compliance services for the insurance industry. It enables brokers to provide quick and detailed calculations as to the tax payable on global re/insurance programmes. "We see this as a big step forward for the London marker as a whole. Global insurance premium tax is incredibly complex, and it is an issue that concerns not just brokers but our clients and underwriters as well. We believe that using IPT Quote will significantly reduce the chances of inadvertent non-conpliance," said LIIBA chief executive David Hough. LIIBA selected IPT Quote after considering the alternatives and is recommending it to all its insurance and reinsurance members. "We look forward to being of service to LIIBA members. Tax on insurance premiums is a burdensome issue, and we hope that IPT Quote will save people working in the London market a lot of time and worry," said TMF VAT & IPT managing director, Richard Asquith. Airmic has so far stopped short of endorsing the initiative unti it receives more information. "In principle, the LIIBA initiative sounds great but we would need to see how it works in practice. At this stage we do not know what the underlying parameters are nor the rationale for any parameters," said Board member Helen Hayden, who is an expert of the subject. "Unless they have asked the people who ultimately pay the tax - in other words Airmic members - for their views of the new product then I think we will have to be a bit wary at least to begin with." A survey in June by Airmic found compliance of global insurance programmes to among members' top concerns. At their recent conference in London FERMA President Peter den Dekker called on the insurance industry to create a global tax database. LIIBA say their scheme would go a long way towards meeting this objective. |
