It was confirmed in the recent budget announcement that insurance duty in the ACT will be abolished from 01 July 2016.
This move was as part of a 5 year plan of tax reform carried out by the ACT Government, which will be completed in this financial year.
Within Australia there are eight separate states and territories which all have their own tax raising powers and typically levy insurance duties on life and non-life insurance premiums. ACT is the first territory to abolish this levy. In addition to states and territories, the Australian Taxation Office (the federal tax office) manages income tax and goods and services tax.
Federal income tax at the effective rate of 3% is payable when premiums are paid to foreign non-resident insurers. Insurance premiums are subject to GST in Australia and depending on the nature of the transaction GST may have to be accounted for in Australia.
According to the budget statement issued by the ACT Government, general rates are being increased incrementally to make up for the revenue lost from the abolition of insurance duty.
If you wish to discuss this matter further or require more information please contact Joseph Finbow at email@example.com