Avalara Inc.

07/04/2022 | News release | Distributed by Public on 07/04/2022 05:24

Latest insurance tax changes in Singapore, Hungary and Kentucky, USA

Below is a summary of the latest Insurance Tax changes:

Singapore

Tax Rate

To increase GST rate in two phases

Tax types

Goods and service tax

Products

Multiple Products Effected - See Summary

Summary

The Singapore Government has confirmed a gradual rate increase of the Goods and Services Tax (GST) from 7.00% to 9.00%.

The rate increase will be carried out in two phases. Effective from the 1st of January 2023, the GST rate will be increased from 7.00% to 8.00%, while the second increase from 8.00% to 9.00% will come into effect from the 1st of January 2024.

The GST rate increase was first announced in 2018 but was delayed because of the COVID-19 pandemic. However, the rate increase was finally announced in the February 2022 Budget Speech. According to the announcement, this was necessary to provide support to Singapore's healthcare system and its elderly people.

Hungary

Tax Rate

Hungary introduces new tax on insurance

Tax types

Insurance surcharge

Products

Multiple Products Effected - See Summary

Summary

In order to finance the rising costs of energy prices and the development of the Hungarian army, the Hungarian Government has recently introduced a new tax applicable to insurance companies and various other business sectors.

In addition to the existing Insurance Premium Tax, the new tax will be charged on insurance premiums received between the 1st of July 2022 and the 31st of December 2023.

The tax applies progressively depending on the amount of premium income received. For compulsory motor third party liability, property and casco insurance, rates vary from 4% to 14% when the premium income is received between the 1st of July 2022 and the 31st of December 2022. For premium income received in the year of 2023, the tax rates vary from 2% to 7%.

Life insurance premiums are also charged at a variable rate depending on the amount of premium income received and the period they were written in. The rates vary from 2% to 6% for the applicable period in 2022, and from 1% to 3% for Year of 2023.

Health, agriculture, and active reinsurance policies are exempt from the new tax.

USA - Kentucky

Tax Rate

Kentucky - 2022 municipal tax rate updates

Products

Multiple Products Effected - See Summary

Summary

The Kentucky Department of Insurance has confirmed the updated rates for municipals that currently implement the Local Insurance Tax. The Department of Insurance has also confirmed the municipals that will soon begin implementing the tax for the first time.

From the 1st of July 2022, the updated rates for the following municipals are as follows:

  • Bullitt County - Rate decrease from 10.00% to 5.00%
  • Clay City - Rate increase from 5.00% to 10.00%
  • Covington - Rate increase from 10.00% to 12.00%
  • Daviess County - Rate decrease from 7.20% to 4.90%
  • Graymoor-Devondale - Rate increase from 5.00% to 8.00%
  • Lyndon - Rate increase from 5.00% to 8.00%
  • Villa Hills - Rate increase from 6.00% to 7.00%

From the 1st of July 2022, the municipals that will begin implementing the tax for the first time and the tax rates that will apply are as follows:

  • Russell - 5.00%
  • Benham - 10.00%

For all municipals, the tax is based on premiums collected in the previous quarter. Estimated payments and returns are filed quarterly, with the final annual reconciliation payment and accompanying return filed by the 31st of March.

This is charged to the insured and is to be adminstered by the insurer, surplus lines broker or the insured depending on how the policy was written.

For more information please visit Avalara for Insurance

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