Latest insurance tax changes in Poland, France and Alberta

Below is a summary of the latest Insurance Tax changes in Poland, France and Alberta

Tax Rate

France - National Health Insurance Fund exceptional contribution discontinued

Tax types

• Caisse nationale de l'assurance maladie

Products

• Group Health
• Private Health
• Accident & Health

Summary

It appears that the exceptional contribution on supplementary health insurance premiums, levied to combat the financial impact of the COVID-19 pandemic, has been discontinued in France following two years of implementation.

Applying since January 1, 2020, the French government imposed an exceptional contribution exclusively on supplementary health insurance premiums. The exceptional contribution was set at a rate of 2.60% for the year of 2020 and 1.30% for the year of 2021. Funds raised from this contribution were allocated to the National Health Insurance Fund.

There were initially discussions to increase the rate for the exceptional contribution in 2022, however, the proposal of raising the rate has been rejected. In addition to this, the Social Security Financing Bill for 2022 does not indicate that the 1.30% rate for 2021 will continue to be levied, therefore it appears that the exceptional contribution will not be levied on supplementary health insurance premiums for the year of 2022 and onwards.

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Poland – Clarification on the applicable rates of Supervisory Levy (Ombudsman) for 2022 

Through clarification from the Polish Financial Ombudsman, it has been confirmed that the applicable rates of the Ombudsman levy have remained as per the Ordinance of 23rd December 2019 and are as follows:  

• 0.0184% of gross premiums for domestic insurance companies  
• 0.02% of gross premiums for foreign insurance companies   

EEA insurers operating a branch in Poland through Freedom of Establishment (FOE) are subject to the domestic insurance company rate. If an EEA insurer does not have a branch and conducts Polish business through Freedom of Services (FOS), the foreign insurance company rate applies. For foreign insurance companies, the amount is calculated based on gross premiums for insurance contracts concluded in connection with the performance of insurance activities in Poland.

Rates mentioned in our previous news alert dated 31st March 2022 regarding the Ombudsman rates for 2022 have been confirmed by the authority as the “maximum level of the ratio” that may be charged to insurers and are not the applicable rates for 2022.

Changes have been updated on the Avalara IPT Lookup and Tax Calculator.

Tax Rate

Canada: Alberta – Release of Circular CT-21R5 on Insurance Premium Tax

Tax types

• Insurance premium tax

Summary

The Alberta Tax and Revenue Administration has recently published Circular CT-21R5. This information circular provides an overview of Insurance Premium Tax in Alberta and highlights legislation originally outlined in the Alberta Corporate Tax Act. 

The circular confirms the following tax rates: 

• 3% for contracts of accident, sickness, and life insurance
• 4% for all other taxable contracts of insurance 

Insurance Premium Tax is not payable on life insurance when amounts receivable are considered an annuity contract, contracts of marine insurance with the exception of insurance of pleasure crafts, premiums that an insurer does not receive under a risk distribution program, and reinsurance.

As emphasised in our previous News Alert, published on January 14, 2022, IPT must be filed electronically through the Tax Revenue Administration Client Self-Service (TRACS) online portal, on or before the 75th day following the end of the insurer’s taxation year. Supporting documents are not required to be submitted at the stage of an IPT return, but they must be retained by the insurer to be provided upon request by the authority.

If you have any questions or comments regarding these insurance tax alerts, please do not hesitate to get in touch.

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