Changes to the reporting of insurance-based taxes in
France are due to take effect from 1 January 2016. Our expert has a
detailed look at the implications.
The French Insurance Premium Tax (IPT) regime is known as one of
the most complicated to negotiate in Europe. Non-life insurers have
to contend with different rates dependent on the type of insurance
business written, compulsory reinsurance on certain contracts (with
further IPT considerations), per-contract fund contributions, taxes
on both insurer and insured, annual reporting and multiple tax
returns, all provided for in nuanced and complex legislation. On
top of this, they have just 15 days following the end of the
reporting month in which to prepare and submit the main IPT return
and pay their tax liability, which can be quite a challenge for a
large insurer with multi-jurisdictional tax liabilities.
Perhaps with the current complexity in mind, the way Motor and
Health insurance is reported is being changed in France. They are
reported in distinctly different ways; accordingly we should
address them separately.
The majority of motor contracts in France are currently subject
to IPT, plus CATNAT IPT and the associated insurer contribution on
the CATNAT premium. Different rates, contributions and rules can
apply for agricultural and commercial land vehicles. Contracts with
damage cover also attract the €3.30 per contract 'Victims
of Terrorism' contribution. Motor liability contracts, or the
liability element of comprehensive motor contracts, are also
subject to a Social Security Contribution of 15% (minus
administrative discount of 0.8%), as well as additional
contributions to the Fonds de Garantie of 1.2% and 0.8%.
Under new measures to be introduced on 1 January 2016, there
will no longer be a social security contribution due on motor
liability business. There will instead be two new rates of motor
IPT, as follows:
15% for compulsory motor liability insurance of agricultural
land vehicles and commercial land vehicles exceeding 3.5 tonnes in
33% for compulsory motor liability insurance.
The existing IPT rates for non-compulsory motor insurance and
motor legal protection will be unaffected by these changes. The
rates of the additional contributions for agricultural vehicles and
the contributions to the Fonds de Garantie are not currently due to
change at this time, though there could still be further changes
announced ahead of next year.
Health insurance is currently subject to both IPT and a social
security contribution. The Health IPT rate (or potential exemption)
varies dependent on the type of contract written; determining
factors include whether the policy was agreed with or without
medical examination or disclosure, whether the insured is employed
in agriculture and other factors. The social security contribution
of 6.27% is due on contracts supplementary to the French healthcare
From 1 January 2016 Health business will be exempt from IPT, and
the social security contribution will be restructured to
incorporate the current IPT regime. This simplifies the system
somewhat, as all premium-based charges on Health insurance will be
settled in one place, however it may cause insurers who only wrote
health business that attracted IPT (not supplementary to the French
healthcare system) to have an additional administrative burden in
terms of filing the social security contribution. The new
social security contribution rates will vary based on the following
Is the cover supplementary to the French healthcare
Has the contract been agreed with or without medical
examination or disclosure?
Are agricultural staff covered?
There are also specific rates for certain types of contract such
as ' First Euro' Contracts covering those not in the care
of French compulsory health insurance, and 'Per Diem'
contracts covering daily allowances. TMF Group's IPT Quote tax
calculation already has the new rates in the system, so that
clients can ensure the correct tax iscalculated on any policies
where the new rates are due. Any insurers with concerns over the
changes to French IPT or French IPT in general, should contact our
expert team who are well equipped to address any concerns.
Our IPT Compliance team will be supporting clients who write
Motor and/or Health business with the changeover to ensure they
remain compliant through the changes. Though the planned changes
are a step towards simplification, it's fair to say that the
French IPT regime remains rather complex.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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