12 September 2012
Further to our alert of 5 July 2012 the Hungarian government has approved the introduction of a new premium tax which will come into force on 1 January 2013.
The new tax applies to gross premiums at the rate of 15% on comprehensive “casco” policies (EU classes 3 to 6) and 10% “accident and property” classes. The wide definition that appears to be given to “accident and property” could mean that the tax applies to many more insurance classes than currently. We understand that the new tax replaces the Fire Brigade Tax but not the 30% tax on compulsory motor third party insurance which remains in force.
All insurers, including FOS and domestic insurers, who are liable to pay the tax must register for the tax and account for the tax at monthly intervals by 20th of the month following the month in which the tax was incurred. It is not clear whether non-Hungarian insurers such as FoS insurers will be required to appoint a fiscal representative.
We are urgently seeking clarification from the Hungarian Tax Office on the details of the tax, and will issue further updates as soon as this is received.