New tax rules have been introduced requiring insurance companies to make yearly returns to the Revenue Commissioners detailing payments made to policyholders. The first such return, for payments made in 2011, is due on 30 September 2012. In future years, the return will be due no later than 30 March of the following year.
The reporting obligation generally applies to all payments made by Irish insurance companies to policyholders in relation to policies, which have acquired a surrender value. There are, however, broad exemptions in respect of payments made to non-Irish residents, banks, building societies and pension schemes (amongst others).
The return must include details relating to the insurance company itself, the policyholder and the payments made, including a description (or reference number) of the policy to which the payments relate. The return must also indicate whether the insurance company knows if the policyholder is the beneficial owner of the payment. The return must be made electronically to Revenue's Planning Division.
A related additional new compliance obligation is for insurance companies is to obtain tax reference numbers of policyholders and, furthermore, to actively verify the information provided. Application forms (including online forms) must be amended to require policyholders to submit their tax reference number. For verification purposes, insurance companies must also request policyholders to provide documents displaying their tax reference numbers (and the insurance company must satisfy itself as to the authenticity and veracity of such documentation). Where a tax reference number is not provided, the insurance company is required to make a money laundering report to the Garda Síochána or, failing that, to include in their annual return an indication that no tax reference number or document verifying the tax reference number was provided.
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