Insurance Premium Tax in Slovakia (10th Jan 2018)
Today, the Ministry of Finance of the Slovak Republic has released a draft law on Insurance Premium Tax. If the draft IPT legislation is approved, it will replace the existing 8% Non-life Insurance Levy. The 8% Levy from compulsory motor third party liability insurance shall remain unchanged. It is expected that the IPT will have the character of indirect tax and insurance companies will be required to collect and pay this tax.
The new tax shall have seven rates from 0% to 18% depending on the class of insurance. The most non-life insurance classes shall be subject to 8% IPT however such non-life insurances like accident and sickness should benefit from a lower IPT rate of 4%. Insurance of luxury vessels and aircraft used for recreational purposes should be taxed at 18%. Moreover, life insurance is expected to be taxed at the IPT rate of 2% and 3% depending on the insurance in question. The draft legislation currently treats pension insurances as IPT exempt.
The new IPT Act shall be effective from October 2018 and the Ministry of Finance expects a tax revenue of EUR 14.2 million this year and EUR 57 million in 2019.
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