3 November 2014
Paul Chater and Maria Panteloglou travelled to Athens in October to meet the authorities responsible for administering and enforcing Greek premium taxes and contributions levied on insurance transactions. This proved to be a very successful series of meetings that allowed us to develop a closer working relationship with each of the authorities.
FiscalReps met the Head of IPT at the MoF to discuss the legislation relevant to IPT, tax authority guidance and case law. The earliest legislation dates back to 1950 and there is much cross-referencing of legislation as subsequent laws were introduced. This provides us with a complex legislation as many of these laws were introduced before Greece joined the EU in 1981. FiscalReps is working with the MoF to provide definitions to terms found in the legislation and obtain more clarification of minor aspects of the legislation. The MoF informed FiscalReps that our rate table was accurate.
FiscalReps met the TEAA PAE (Pension Fund), who confirmed that the Government will abolish the 1.0% and 2.0% contribution at the end of 2014 in spite of an appeal process initiated by the Pension Fund. Thus, FoS insurers should not be liable for any contribution with effect from 1 January 2015. Please note, however, that the fund will still exist and it is likely that an increased contribution will be applicable to domestic insurers based on employees’ wages. It is uncertain at the moment as to whether a new contribution on insurance transactions will replace the existing one. It is believed that official discussions in Greece will be held during the first quarter of 2015 and the Pension Fund will update us on any developments.
We met the Director of Financial & Trading Services at the Motor Guarantee Fund (MGF), who is responsible for the 6.0% motor contribution. There was an interesting discussion around the tax point as the local rules may not be in accordance with FoS practice. FiscalReps clarified the online registration and filing process as well as the recent debate around the additional 0.6% contribution. Essentially, domestic and FoS insurers should file and settle the 0.6% contribution to the MGF even though it was described as a TEO contribution (National Road Fund) before the TEO was abolished.
Finally, FiscalReps met the Head of the Department at the Bank of Greece responsible for administering and enforcing the life contribution, the Private Life Insurance Guarantee Fund (PLIGF). The Bank of Greece confirmed our understanding of the legislation. The contribution applies to all nine classes of long-term business and insurers should be aware that ceilings apply to lump sum and periodic premium payments in specific cases. Furthermore, FoS insurers are exempted from the PLIGF if the insurer’s home territory has a similar guarantee fund in the event of the bankruptcy of an insurer or the revocation of the life insurance company’s licence.
FiscalReps is working closely with each authority to ensure FiscalReps’ rate table is correct.
It is interesting to note that at a time when the Greek Government is looking to generate extra revenue we have seen two contributions on insurance transactions abolished in 2014, namely the TEO earlier this year and the TEAA PAE at the end of 2014.