Taxation of insurance premiums
The Insurance Premiums Tax Act (IPTA) entered into force on 01.01.2011 (it was promulgated in the State Gazette issue 86 of 02.11.2010). This act introduced a new type of tax – tax on the insurance premiums based on insurance contracts subject to taxation where the risks are covered by the insurance companies. The rate of the insurance premiums tax is 2 %.
The tax due for the tax period shall be paid by the liable persons by the end of the month following the calendar quarter for which the tax is due, to the account of NRA’s Territorial Directorate where the persons are registered.
The tax return for the previous calendar quarter shall be submitted by the insurance companies by the end of the month following the quarter.
The registration of the tax agent, and where the insurance company has not indicated a tax agent under Art. 8, para. 1, item 2 of the Insurance Code – of a person whose work is subject to the freedom of provision of services, shall be made as per the order and procedure of Art.82 of the Tax and Social Security Procedure Code, in the competent Territorial Directorate of the National Revenue Agency under Art.8 of the same Code on the basis of the first submitted tax return.
Taxable persons shall be:
Exempt from taxation shall be the insurance premiums under reinsurance and retrocession contracts, life insurance and rent, marriage and child insurance, life insurance related to investment fund, permanent health insurance, capital buyout, additional insurance, cargo during international transportation, aircrafts and vessels insurance, as well as the civil liability related to the ownership and usage of aircrafts and vessels, and insurance of cargo during international transportation.
The tax event shall be the receipt of the insurance premium by an insurance company under a concluded insurance contract subject to taxation; in case of rescheduled payment of the insurance premium the receipt of each part of the premium shall be considered a separate tax event. The tax event occurs on the date when the insurance company receives the insurance premium.
The tax base shall be the insurance premium received by the insurance company under an insurance contract subject to taxation.
In case of rescheduled payment of the insurance premium the tax base shall be the part of the insurance premium received by the insurance company.
The tax due to be paid by the insurance companies for the tax period shall be the difference between the total amount of the tax due by the insurance company for the tax period, and the total amount of the tax on the insurance premiums returned during this period.
The total amount of the tax on the insurance premiums returned during the tax period shall be calculated by multiplying the amount of the already levied insurance premiums returned during this period by 2%.