when is ipt payable?

An insurance company that transacts insurance business in Texas without being licensed by the Texas Department of Insurance must pay this tax. If not paid by the due date, the tax is a liability of the insurer, the agent and the insured.

4.85 percent of taxable premiums

Yearly: March 1 for the previous calendar year (for example, March 1, 2015, for premiums received in 2014).

Select the amount of taxes you paid in the preceding state fiscal year (Sept. 1 – Aug. 31) to find the reporting and payment methods to use.

The insurance companies subject to IPT are:

All types/categories of insurance are concerned, except for life insurance and insurance covering maritime vessels.

If the insurer's head office is not in an EU Member State and they do not have a permanent establishment in Luxembourg, the IPT is payable by the insurer's designated tax representative.

If the task of filing the returns and paying the tax is incumbent on the insurer's tax representative, the latter must be:

Luxembourg IPT does not apply to reinsurance companies.

Within 15 days of commencing trading, insurance companies must notify the competent office of the Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA - AED) using the form provided for that purpose (initial declaration).

IPT returns must be filed before the 15th day of the month following the taxable period.

Should an insurer cease trading in the course of the year, they must file their return for the current taxable period before the 15th of the month following that in which they ceased trading.

The person liable for the tax must submit their tax return on MyGuichet.lu with the Registration Duties, Estates and VAT Authority.

The IPT return must include all of the details required to establish the amount of tax to be paid or refunded for the taxable period – namely:

The tax is payable when the return is filed, if it is filed before the legal deadline (last day of the month following the taxable period). If not, the tax must be paid on the day the deadline expires.

If the insurer had wholly or partially refunded the premium received from the policy holder – because the policy was terminated, or because the cost of the policy fell – the insurer is entitled to a tax adjustment.

The adjustment must be specified on the tax return.

The tax base comprises the amount paid for the insurance policy – i.e. the amount received by the insurance company in return for the insurance. The tax is then calculated on the basis of the amount received in respect of the policies sold during the taxable period. At the company's request, the AED may base the calculation on the amount in respect of the policies issued during the taxable period.

The tax rate varies between 3 % and 6 % depending on the nature of the insurance policies concerned.

The person liable for the tax – the insurer or their tax representative – must keep detailed accounts for the purpose of applying the tax and for tax audits conducted by the AED. The accounts must contain separate records of all data to be included in the return.

The documents and records required for audits to be conducted must be kept for 10 years from their closing or effective date.

The AED may conduct audits of the insurance policies sold by the insurers.

At the company's request, the AED may accept the use of the insurer's business records. Such records must be different for each type/category of insurance.

Furthermore, the insurer or their tax representative must submit all documents in connection with the insurance policies, and provide all necessary information, to the AED inspectors conducting the audit, should they be asked to do so.

The AED will immediately correct any errors observed in the insurer's returns or during the audit.

The company may recover the non-payable portion of the tax if, for example, a policy is terminated prematurely and the company is unable to adjust the tax. In this case, the company's accounts must contain a note referencing the original policy.

Should the insurer or their tax representative fail to file a return and pay the tax in the month following the taxable period, the AED may require the payment of provisional instalments, to be set off against the tax liability.

Any insurer, or their tax representative, who fails to file a return and pay the tax risks a fine of between EUR 50 and EUR 5,000. Furthermore, if the tax is not paid in full or in part by the set deadline, the person liable for the tax may be fined a tax penalty of up to 10% of the unpaid tax.

Anyone who commits acts for the purpose of evading the payment of the tax or fraudulently obtaining a tax refund risks a fine of 10% of the evaded tax and at least EUR 125.

Moreover, if the AED has serious, precise and concordant reasons to doubt the accuracy of the filed returns, it may impose an ex officio tax assessment on the insurer or their tax representative, if the doubts cannot be dispelled by the person liable for the tax.

The tax penalties are set by the director of the AED or their deputy.

They must be paid in the month in which written notification of the penalty is received.

The AED's decisions may be appealed. Appeals must be justified and addressed in writing to the director of the AED within 3 months of the date of notification of the decision.

The director may:

That decision may itself be appealed by means of a writ filed by a lawyer with the Luxembourg district court for civil matters within the same timeframe of 3 months from the date of notification.

If the insurer has been not notified of a decision within 6 months, they may consider that their claim has been rejected and may then engage the services of a lawyer to lodge an appeal with the Luxembourg district court for civil matters.

Insurance Premium Tax (IPT) is a tax on general insurance premiums and applies to types of insurance, such as home insurance, landlord insurance, car insurance, and pet insurance. You can get two different rates of IPT: a standard rate of 12% and a higher rate of 20%, which applies to, electrical appliance insurance, travel insurance and some vehicle insurance. It is paid for by the policyholder but collected and paid to HMRC by the insurer.

In this guide, we look at the background of IPT, how it works, how it is calculated, how it’s increased over the years and the insurances that are exempt from IPT.

IPT was introduced in October 1994 at a single rate of 2.5%.

In January 1973, the UK joined the European Economic Community (EEC), and as a member nation was required to adopt VAT into the taxation system. However, insurance premiums are not subject to VAT; so, in 1994, the Government introduced Insurance Premium Tax.

In 1997, the standard rate of IPT rose to 4%, and a higher rate of 17.5% was also introduced. Over the years IPT rates have fluctuated and at present they stand at 12% (standard rate) and a 20% higher rate (more details below).

The higher rate was brought in line with the VAT rate to discourage the practice of manipulating the combined sale of products and insurance, whereby an exaggerated portion of the sale might be attributed to an insurance policy for the sake of a lower tax rate.

Insurance tax premium creates revenue for the UK Government. When a customer pays their insurance premium, the insurance providers must pass tax to directly to the government. IPT is currently either 12% or 20%.

Insurance tax premium is a compulsory tax that insurance companies or insurance brokers must pay.  Historically, IPT is added to customers’ premiums and any increases in IPT will directly affect the price they customer pay.

No, IPT is a one-off tax on a single product. In this respect, IPT has more in common with tobacco duty. VAT, on the other hand, is passed from seller to buyer until it reaches the end user who pays a tax on the cumulative elements of a product or service.

Unlike VAT, Insurance Premium Tax cannot be claimed back.

The tax on an insurance policy is calculated as a percentage of the premium: 12% standard rate or 20% higher rate. No IPT is due on service fees.

For example, an insurer sells a policy for £400 and charges the customer £70 in service fees. The IPT is either 12% or 20% of £400, so the policyholder would pay either £48 (basic rate) or £80 (higher rate).

Policies that are subject to the higher rate of IPT fall into two categories. The first is travel insurance. The second is insurance sold in relation to certain goods, when the insurance and the products are sold by, or through, the same person or entity.

These goods are:

For example, if you buy a car, and you insure it through the person or business who sold you the car, the insurance policy will be subject to the higher IPT rate. However, if you buy your insurance policy from a different company, you’ll be charged the standard rate of IPT.

IPT rate:

When the IPT rate rises, insurers will sometimes lower their prices so that customers aren’t put off by a sudden increase. IPT must still be paid, though. It’s not unusual for insurers to reduce their own income for the sake of retaining customer goodwill. But that’s not always the case, and the increase could well be passed on to the customer.

Not all insurance policies are subject to IPT.

Exemptions include:

Tax on goods and services generate income which is an important element of public funds. Most of these goods and services generate funds through VAT or “sin” taxes (such as tobacco, alcohol, gambling). Insurance is a huge sector that generates billions of pounds a year in IPT for the public purse. Without this tax the UK would be poorer and public services would suffer.

It’s the insurance companies’ responsibility to pay IPT and in most cases the tax is passed on to the customer.

There are ways to reduce your insurance premium, which will bring down the amount of IPT you pay. These include; additional security features for your home, car, or IT equipment or increasing your voluntary excess which would mean a lower premium but potentially a high price to pay in the event of a claim.

Paying a premium in monthly instalments is usually a more expensive option than paying it all in one go. So if you can pay your premium annually the overall price will be lower and so will the IPT.

Insurance Premium Tax (IPT) is a tax on general insurance premiums. There are 2 rates:

There are a number of exemptions from IPT, including:

Details of all exemptions are given in Notice IPT1 Insurance Premium Tax.

You need to register and account for IPT if you’re:

You don’t need to register if you’re an insurer who only receives premiums which relate wholly to exempt insurance contracts.

But you will need to register if you’re an insurer who receives premiums partially in relation to exempt insurance contracts and partially in relation to taxable contracts.

HM Revenue and Customs (HMRC) will confirm whether or not you have to submit returns, based upon the value of the premiums involved and the corresponding taxable proportion.

You must be registered from the date you receive (or someone receives on your behalf) your first taxable premium.

You need to tell HMRC within 30 days of forming the intention of receiving taxable premiums as the insurer.

If you’re a taxable intermediary you need to register within 30 days of the date on which you decide to charge taxable intermediaries’ fees.

You can register using the online form or if you are unable to use it you can use the print and post form IPT1.

If you are a Lloyd’s Syndicate, or, wish to appoint an agent to deal with your Insurance Premium Tax affairs, you can only register using the print and post form. You should send your completed form to:

If you’re a partnership you can only register using the print and post forms IPT1 and IPT 2, Partnership Details ( which asks for name and address details of all partners).

To apply for group treatment, you must choose one of the corporate bodies to act as the ‘representative member’.

The representative member must fill in an IPT1 print and post form and form IPT 50, Application for Group Treatment. All group members must also complete the form IPT 51, Group Member Details.

Groups can only apply using the print and post forms.

You can get forms IPT 1 and IPT51 online and forms IPT 2 and IPT 50 by calling the VAT Helpline on Telephone: 0300 200 3700, Monday to Friday, 8am to 6pm.

Send the completed forms to:

Once you’ve registered, HMRC will send you a ‘notice to file’ telling you when you need to submit your return, usually every 3 months. You should send a return even if you don’t owe any Insurance Premium Tax.

You can use the online service to send your return (IPT100). Make sure you send your payment for any tax due when you submit your return. If your return deadline falls on a weekend or a bank holiday, make sure your payment reaches HMRC on the last working day before the due date.

Find out how to pay Insurance Premium Tax.

You must keep:

FAQs are for general guidance only. For a written advice, as it relates to your business, please request an advisory opinion, pursuant to NAC 360.190.

Pursuant to NRS 680B.032 each quarterly payment is due on the last day of the last month in each calendar quarter and is payable on or before the last day of the month next succeeding the calendar quarter for which the payment is due.

Pursuant to NRS 680B.032 each insurer which paid or is required to pay a tax of at least $2,000 on net direct premiums and net direct considerations written during the preceding calendar year, shall file a quarterly report.

NRS 680B.027 requires insurers to pay a 3.5% tax on net direct premiums and net direct considerations written in Nevada.  The statute does not prevent the insurer from passing this cost on to their customers.