Europe

Insurance Premium Tax in Croatia

Image

By Kateryna Binkowska, SOVOS. Kateryna Binkowska joined Sovos as a Compliance Services Representative in 2019. She has a Bachelor Degree in Economics and Management from the National Economic University, Kiev, Ukraine and from The Institute of Certified Bookkeepers, London.

Croatia currently levies an Insurance Premium Tax (IPT) on insurances written under the Freedom of Services (FoS) duty. The IPT in Croatia applies only for specific classes of business, such as Motor and Fire coverage. Both taxes, Motor IPT (MIPT) and Fire Brigade Contribution (FBC), are calculated on the insurance policy premium charged to the policyholder. The insurer is liable for all taxes.

Motor Insurance Premium Tax 

There are currently two different IPT tax rates in force for motor insurance in Croatia: 

  •  “Motor Vehicle Liability” (third-party insurance) is subject to an IPT rate of 15% 
  •  “Motor” (Hull Insurance) is a subject to an IPT rate of 10%. This class of business covers expenses arising from an involuntary collision or crash in any motor vehicle (CASCO insurance) 

Motor vehicle IPT is an insured borne tax that is required to be reported monthly and payable within 15 days following the end of the month. The tax point for this type of IPT is set as the date the policy is signed, and businesses should make payment in local currency: Croatian Kuna (HRK). The exchange rate for those payments should be set to the rate published on the last working day by the Croatian National Bank. 

It’s important to remember that two different sets of returns should be filed for each risk of motor insurancecovered. Also, companies should make the payment under the correct corresponding reference numberaccording to the associated insurance risk.   

Croatian Motor IPT requirements: 

Currently, there is no obligation to submit a Motor IPT return when no taxes have been paid for the reporting period (NIL). 

The penalty for a late payment is generally 12% communicated by the Zagreb Regional Tax Office (PoreznaUprava).   

The annual Motor IPT Report must be submitted on 31 January following the end of the reporting year.   

Croatian IPT: Fire Coverage

The Fire Brigade Contribution (FBC) tax is levied on the payment of premiums for insurance contracts concluded in Croatia. The local law on Fire Prevention and Firefighting requires insurance companies covering a fire risk to contribute 5% of the fire insurance premium. The 5% contribution should be apportioned to the fire risk element of the insurance policy.  

The FBC is an insurer borne tax that is required to be reported quarterly and payable within 30 days following the end of the quarter. The tax point for this type of IPT is the date payment is made, and businesses should make the payment in Croatian Kuna to the Croatian Firefighting Association (Hrvatska Vatrogasna Zajednica). There is no requirement for businesses to submit NIL returns.  

The FBC breakdown is as follows:   

  • 30% for the Croatian Firefighting Association  
  • 30% for the County Fire Brigades and of the Fire Brigade of the City of Zagreb 
  • 40% for the regional fire brigade where the insured property is situated 

The insurer is liable for all taxes. If the insurer doesn’t declare and remit taxes, the relevant authority may impose a fine and undertake an assessment of the tax. 

Trending
Share this Post:
Posted by IRL Editor

Advertisement

ad ad

Related articles

Patrick Rastiello joins Ardonagh Specialty to lead North America Reinsurance expansion

Ardonagh Specialty has appointed Patrick Rastiello as CEO* of its North American reinsurance operations.   Patrick will be responsible for building Ardonagh Specialty’s US reinsurance...

Global Markets Overview: February 2024

In this Global Markets Overview, we explore our global outlook and share what we think it means for 2024.  https://www.wtwco.com/en-gb/insights/campaigns/global-markets-overview As...

EAMONN CUNNINGHAM WINS RIMS HARRY & DOROTHY GOODELL AWARD

Risk Management Trailblazer Presented with RIMS Highest Honor for Lifetime Achievement in Risk Management  NEW YORK (February 13, 2024) – At the RIMS New Zealand and Pacific Island...

Insurer’s Lease More Than Doubles Its Chicago Office Space

Sompo International Plans Move to 46-Story Tower at 155 N. Wacker A global specialty insurance provider is more than doubling the size of its Chicago office in a move a few blocks north, bucking the trend...

Haynes and Boone, LLP is pleased to announce that Peter A. Halprin has joined the firm as a Partner

Haynes and Boone, LLP is pleased to welcome Insurance Recovery Partner Peter A. Halprin to the firm’s New York City office. A Chambers USA-ranked attorney, Peter joins from Pasich LLP, where...

LIO Specialty Launches Revolutionary Online Portal for Life Science Insurance Solutions

Leading the Excess and Surplus Lines Market with Innovative Coverage for Cannabis and Nutraceutical Industries  West Conshohocken, PA– LIO Specialty Insurance Company proudly announces the launch...