1 January 2012
Further to our alert in October, the Central Bank of Ireland has announced that they will start to charge the new levy on insurance premiums from 1 January 2012. Initially the rate will be set at 2% of Gross Premium received, the maximum the Bank is allowed to charge, and will be due on all premiums paid on or after that date.
The levy is due on all non-life contracts of insurance where the risk is located in Ireland. However, exemptions are available to the following contracts of insurance:
Classes 4, 5, 6, 7, 11 and 12, (i.e. Marine, Aviation and Transport)
Classes 1 (Accident) and 10 (Motor Vehicle Liability) insofar as they relate to insurance covering passengers in marine or aviation vehicles and carrier’s liability
Certain dental and health insurances
The compliance procedures of the new levy will follow that of the existing Stamp Duty and Government Levy, requiring insurers to file and pay tax on a quarterly basis, within 30 days of the quarter end.
The purpose of the levy is to help finance the Insurance Compensations Fund. As such the Central Bank must review the rate and alter it as it sees fit to ensure the Fund is adequately financed. Any changes to the rate must be published on a the website of the Central Bank and each insurer and each insurer authorised in another Member State must be notified of the new percentage and the date on and after which the new percentage is to be used. If no such notification is received, then the existing rate remains. The maximum percentage that the Central Bank is able to set is 2%.