Web alert: German Insurance Premium Tax (IPT): revised arrangements
News & Insights 14 February 2014
Changes to the German Insurance Premium Tax act
Until recently, the club has not debited or collected German IPT, which is charged at 19% on premiums due to the insurer. Members with entered ships liable for the tax either pay it directly or where they utilise a broker, have arranged for their broker to collect and pay the tax to the authorities.
Changes to the German Insurance Premium Tax act require that for premiums due after 31 December 2013:
- The tax amount has to be openly stated
- The tax rate and the insurer's IPT number provided by the Federal Tax office have to be stated
If your clients have ships that are liable for German IPT entered in the Standard club, any tax is usually debited, collected and settled by you. We wish to continue this arrangement.
The German Insurance Premium Tax act (section 7, paragraph 5) does permit the appointment of a tax representative on the insurer's behalf to perform that work. The club therefore wishes to formally appoint you in this role. An agreement for that purpose is attached to this letter. An electronic version is available at Standard Club forms. Please complete and return one signed copy to us.
We also ask for confirmation of IPT paid in respect of P&I and Defence premiums for the 2013 and in due course, 2014 policy years. Please provide copies of the relevant declarations and payments made to the Federal tax office.
If a member has entered ships that are liable to German IPT and does not wish to appoint their broker or themselves as the club's tax representative, the club is legally obliged to debit IPT and pay it to the authorities. In that case, please notify your usual club underwriter or the undersigned as soon as possible and provide details of entered ships liable to IPT so that we can debit accordingly.
The club is registered with the German federal tax office under reference number 9116/817/06803.