The coming 12 months will see tax collection agencies across Europe increase their use of technology to pursue non-payers of insurance premium tax, cautions tax compliance specialists FiscalReps.
At the company’s Annual Indirect Tax Academy in London on Wednesday, FiscalReps chief executive Mike Stalley, commented: “European tax authorities have significantly increased their use of online filing for insurance premium tax returns – we’ve seen a 30% rise in 2013 alone. The growth of electronic IPT records will make it easier for tax inspectors to analyse taxes paid and identify potential compliance failures by taxpayers. At the same time, some EU member states are recruiting tax inspectors in ever greater numbers to help repair strained public finances. We therefore expect to see a new era of ‘smart’ IPT enforcement across the EU.
“Tax compliance remains a ‘hot’ topic: high profile names in the media like Starbucks and Google have ensured tax compliance is viewed as a reputational risk for many corporates. As a result, insurers and insureds must strive to be IPT-compliant in 2014 and are well advised to avoid tax planning that could be seen as overly aggressive. The alternative is to face a heightened risk of fines and reputational damage.
“Just as tax inspectors are harnessing technology, insurers can adopt the same approach to improve their compliance. We have seen increased demand for tax compliance management software, such as our taxDNA® solution, from insurers and captive managers. We expect this trend to accelerate in coming months.”
The FiscalReps Indirect Tax Academy – formerly known as the IPT Forum – provides a range of opportunities for brokers, underwriters, tax managers and risk managers to stay current with evolving best practice and technology solutions in this challenging area. Guest speakers this year included Peter Wintersgill, Chair IUA Indirect Tax Working Group, and Alma Schrödter, Head of Tax at VKB group who explained the premium tax technology partnership between FiscalReps and VKB.