Taxation in Insurance: a

European Comparative
Study
Authors: Szecsi Bernadett, Guțu Teodora
Professor: Simona Laura Dragoș
Table of contents
01 02
Indirect Taxation Income Tax
on Insurance Contracts in Treatment
Europe

03 04
Insurance Premium Insurance Taxation in
Taxation Romania
across Europe
 01
Indirect Taxation
on Insurance Contracts in Europe
Title
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02
Income Tax
Treatment
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 03
Insurance Premium
Taxation across Europe
Insurance premium tax (IPT)
Insurance premium tax (IPT) is a type of tax that is imposed on insurance premiums. It is a
specific tax on the premium charged by an insurance company for a policy, and is typically
calculated as a percentage of the premium. The IPT is usually collected by the insurance
company, which then remits it to the relevant government agency. The rate of IPT can vary
depending on the country and type of insurance, and may be different for different types of
policies, such as life insurance, motor insurance, or property insurance.
The purpose of IPT is to generate revenue for governments and to ensure that the consumption
of insurance services is taxed in the same way as other goods and services. The amount of
IPT can have a significant impact on the cost of insurance policies, especially for those
policies with high premiums.
 IPT deducting:

For example, a policyholder in Germany purchases a car insurance policy with an annual
premium of €1,000. The IPT rate for motor insurance in Germany is currently 19%.
Therefore, the policyholder would pay €1,000 to the insurance company for the policy, and
the insurance company would then remit the €190 IPT to the German government on
behalf of the policyholder.
It's worth noting that the IPT rates and rules can vary between EU countries and types of
insurance policies. So, it's important to check the relevant laws and regulations for the
specific country and type of insurance policy in question to determine the applicable IPT
rate and calculation method.
 European Insurance Premium Tax (IPT)
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20.00%
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Country rate 1 Country Rate 2
Stamp Duty (SD) on insurances written under the Freedom
of Services (FoS) regime.
Stamp Duty (SD) is a tax that is imposed on certain types of insurance policies in some
countries. In the context of insurance written under the Freedom of Services (FoS) regime, the
treatment of SD can vary depending on the country where the policyholder is located.
The Freedom of Services regime allows insurance companies authorized in one EU member
state to provide insurance services in another EU member state without having to establish a
physical presence in that state. However, the treatment of taxes, including SD, can be different
in the state where the policyholder is located compared to the state where the insurer is
authorized.
On the other hand, some EU member states do not impose SD on insurance policies written
under the FoS regime, or may impose a reduced rate of SD.
 Example: SD under FoS
For example, policyholder in France purchases a home insurance policy with an annual premium of
€1,000 from an insurance company based in another EU country. In France, Stamp Duty is a tax that
is imposed on certain types of insurance policies, including home insurance, at a rate of 9%.
However, if the insurance policy is written under the Freedom of Services regime, the treatment of
Stamp Duty can be different.
In this example, if the insurance company is authorized in another EU country and writes the policy
under the FoS regime, the policyholder may not be required to pay Stamp Duty in France. This is
because the policy is considered to be "used and enjoyed" in the country where the insurer is
authorized, and therefore not subject to French Stamp Duty.
However, it's important to note that the treatment of Stamp Duty on insurance policies written
under the FoS regime can vary depending on the country and type of insurance policy.
Policyholders should check the relevant laws and regulations in their country to determine the
applicable Stamp Duty rates and calculation methods, and whether Stamp Duty is payable on
insurance policies written under the FoS regime.
 04
Insurance Taxation in
Romania
 IPT in Romania
In Romania, Insurance Premium Tax (IPT) is a tax that is levied on certain types of insurance policies.
The tax is imposed on insurance companies, which are required to collect and remit the tax to
the government on behalf of the policyholders. The IPT rates in Romania vary depending on the
type of insurance policy.
Motor Third Party Liability (MTPL) insurance: The IPT rate for MTPL insurance is 2% of the premium
amount.
Property insurance: The IPT rate for property insurance is 2.25% of the premium amount.
Liability insurance: The IPT rate for liability insurance is 2.25% of the premium amount.
Health insurance: The IPT rate for health insurance is 3.5% of the premium amount.
 IPT in Romania
It's important to note that the IPT is calculated based on the gross
premium amount, and is included in the total premium charged to
the policyholder. The insurance company is responsible for
collecting the tax from the policyholder and remitting it to the
government on a regular basis.
The IPT is a significant source of revenue for the Romanian government,
and is used to fund various programs and initiatives related to
insurance and public welfare. Insurance companies operating in
Romania are required to comply with all relevant tax laws and
regulations, and failure to do so may result in penalties and other
consequences.
VAT in Romania
In Romania, Value-Added Tax (VAT) is applied to most types of insurance
policies, including life insurance, property insurance, and liability insurance.
The standard VAT rate in Romania is currently 19%, and is applied to the gross
premium amount charged to the policyholder.
However, there are some exceptions to the standard VAT rate for insurance
policies in Romania. For example, agricultural and forestry insurance policies
are subject to a reduced VAT rate of 9%. Also, reinsurance services provided to
foreign insurance companies are exempt from VAT.
VAT in Romania
It's important to note that the VAT is calculated separately from the
Insurance Premium Tax (IPT) that is also charged on certain types of
insurance policies in Romania. The IPT is levied on top of the VAT, and is
collected by insurance companies on behalf of the government.
Insurance companies operating in Romania are required to comply with all
relevant tax laws and regulations, including those related to VAT. Failure to
do so may result in penalties and other consequences. It's important for
policyholders to carefully review their insurance contracts to understand the
total amount of taxes and fees being charged.
Stamp Duty in Romania

In Romania, stamp duty is a tax that is applied to certain legal

documents, including insurance policies. The stamp duty rate for
insurance policies in Romania is currently 0.5% of the gross
premium amount charged to the policyholder.
The stamp duty is paid by the policyholder, and is typically
collected by the insurance company and remitted to the
government on behalf of the policyholder. The stamp duty is a
one-time fee that is charged at the time the insurance policy is
issued.
Stamp Duty in Romania
It's important to note that the stamp duty is separate from the Insurance Premium
Tax (IPT) and Value-Added Tax (VAT) that are also charged on certain types of
insurance policies in Romania.
The IPT and VAT are ongoing taxes that are charged on each premium payment,
while the stamp duty is a one-time fee charged at the time the policy is issued.
Insurance companies operating in Romania are required to comply with all relevant
tax laws and regulations, including those related to stamp duty. Failure to do so
may result in penalties and other consequences.
 Special Tax in Romania
The Romanian special tax on insurance is a tax that is imposed on insurance premiums
for certain types of insurance policies. The tax is levied by the Romanian government
and is collected by the insurance companies when they sell the policies. The tax was
introduced in Romania in 2010 and applies to several types of insurance policies,
including:
Property insurance - this includes policies that cover buildings, homes, and other
property.
Motor vehicle insurance - this includes policies that cover cars, motorcycles, and other
types of vehicles.
Liability insurance - this includes policies that cover liability for damages or injuries
caused to others.
 Special Tax in Romania
The tax rate varies depending on the type of insurance policy, but it
generally ranges from 0.5% to 2% of the insurance premium. The
tax is paid by the policyholder as part of the premium, and the
insurance company is responsible for collecting and remitting the
tax to the government.

The purpose of the special tax on insurance is to generate revenue

for the government, which is then used to fund various social and
economic programs. The tax is also intended to promote the
development of the insurance industry in Romania by ensuring that
insurers have adequate resources to cover their risks and to invest
in new products and services.
Resources
Did you like the resources on this template? Get them for free at our other websites:

• https://www.airmic.com/news/guest-stories/overview-insurance-premium-taxation-across-europe
• https://library.croneri.co.uk/cch_uk/chipt/app5
• https://www.comparethemarket.com/car-insurance/content/a-guide-to-insurance-premium-tax/
• https://contabilul.manager.ro/a/2805/fiscalitatea-asigurarilor-in-romania-comparativ-cu-alternative
le-existente-in-diverse-tari.html