For the payment of foreign insurance premium tax, parafiscal charges and stamp duties on policies covering risks situated in one or more of the Freedom Of Services (FOS) countries outside the Netherlands, the VNAB has the Foreign Insurance Premium Tax Procedure 2010 in place.
This procedure must be regarded as an urgent call for VNAB brokers and insurers to act accordingly, to ensure a uniform method to deal with foreign insurance premium tax.
Some brokers have stopped following the VNAB procedure in full since the beginning of 2016. The basic principle of the current procedure is that the leading insurer is responsible for the tax return and the payment of foreign insurance premium tax, unless otherwise agreed. For instance, an agreement that in case of co-insurance contracts, all participating insurers are severally liable to pay the insurance premium tax payable abroad. The procedure stipulates that one of the insurers on the contract may request such an agreement.
The brokers that no longer follow the VNAB procedure, depart from it by no longer paying the taxes and charges to the (leading) insurer on the (co-)insurance contract, but instead to the panel of insurers; not at the request of one of the insurers, but on their own initiative. In that case, the leading insurer does not take care of the payment, also on behalf of the following insurers, but each insurer is responsible for the payment of tax on their own underwritten share on a policy.
The VNAB conducted a small-scale survey into the current practice among members. We’ll keep you posted about this.