INSURANCE PREMIUM TAX
The use of the Insurance Contracts Tax Act in the Republic of Slovenia
Detailed description
2nd version, February 2016
TABLE OF CONTENTS
1.0 INSURANCE CONTRACTS 3
2.0 PERFORMANCE OF INSURANCE CONTRACTS 3
3.0 INSURANCE CONTRACTS TAX 3
4.0 PAYMENTS OF THE TAX ACCORDING TO THE INSURANCE TAX ACT FROM ABROAD TO SLOVENIA 4
5.0 PENALTY 5
1.0 INSURANCE CONTRACTS
Insurance contracts are defined in the Insurance Act – ZZavar and they include performance and realization of contracts about property and life insurance or reinsurance, with the exception of obligatory social insurance. The law classifies insurance in relation to main hazards, covered by insurance, into insurance types and defines who and under which conditions may conclude insurance contracts in the territory of the Republic of Slovenia. In accordance with the law insurance companies of EU Member States may establish a branch office in the territory of the Republic of Slovenia or they may be authorised in accordance with the law to directly conclude insurance contracts in the territory of the Republic of Slovenia.
2.0 PERFORMANCE OF INSURANCE CONTRACTS
Insurance contracts may be performed by:
- an insurance company with the seat in the Republic of Slovenia, which has acquired a permit for performance of these contracts from the Agency for Insurance Supervision;
- a branch of a foreign insurance company, which has acquired a permit for performance of these contracts from the Agency for Insurance Supervision;
- an insurance company from Union, which operates within the EU and which in accordance with ZZavar, establishes a branch in the territory of the Republic of Slovenia or is authorised to directly performs insurance contracts in the territory of the Republic of Slovenia in accordance with the ZZavar.
The Agency for Insurance Supervision issues a permit for performance of insurance contracts according to individual insurance types.
The Financial Administration is in accordance with the act, which arranges the tax service, also competent for management and maintenance of the tax register and tax records. A foreign individual or legal entity with no seat or any other registered form in the Republic of Slovenia have to enter into the tax register if this person performs business activities in the territory of the Republic of Slovenia. A foreign person with no seat or other registration form in the Republic of Slovenia submits an application for the entry into the tax register at the financial office, on the territory of which this person will perform services, before the beginning of business activities in the Republic of Slovenia.
3.0 INSURANCE CONTRACTS TAX
The Insurance Contracts Tax Act, ZDPZP, introduces an obligation of charging and paying the insurance contracts tax in the territory of the Republic of Slovenia. The insurance contracts tax is paid from concluded insurance contracts. The entity liable for this tax is an insurance company or other legal entity, which concludes insurance contracts in the territory of the Republic of Slovenia.
The obligation for charging tax begins when the person liable for the tax, concludes an insurance contract, which is concluded when an invoice is issued for the payment of an insurance premium. A personal insurance contract is concluded when the insurance premium is paid. A base for charging tax is a premium or contribution, which is paid on the basis of a concluded insurance contract. The tax is paid at the rate of 8.5 percent from the tax base.
The higher tax rate of 8.5 percent is applied from January 1 2015 onwards and is levied on insurance premiums for insurance business conducted from the tax period from January 2015 onwards.
The insurance contracts tax is not paid for:
1. obligatory pension and disability insurance and obligatory health insurance,
2. property (accident and health) and life insurance, where the insurance relation is not shorter
than 10 years,
3. insurance, which covers hazards outside the territory of the Republic of Slovenia,
4. reinsurance.
Life insurance includes all types of life insurance irrespective of the fact whether the insurance amount is paid in one amount or annually.
The person liable for the insurance contracts tax pays it on concluded insurance contracts in a calendar month. The person shall provide in his/her records the data on tax bases, on the basis of which the insurance contracts tax is charged and paid. On the basis of data records the person liable for the tax prepares a monthly settlement of the tax and submits it to tax authorities in 15 days after the end of the month, for which the settlement has been prepared.
The following data shall be evident from the settlement: the period, for which the tax is paid, tax base, tax rate and amount of tax charged. The form for the settlement is not prescribed, but the proposed form is available on the web side of the Financial Administration of the Republic of Slovenia. The person liable for the tax shall submit the tax settlement to tax authorities irrespective of the fact whether he/she is obliged to pay the tax for the period, for which he/she has submitted the settlement The person liable for the tax shall submit the form in electronic form through electronic system eDavki. The charged tax shall be paid in 15 days after the end of the month, for which the settlement has been prepared.
In cases when the insurance contract for property (accident and health) and life insurance, where the insurance relation is not shorter than 10 years, expires before the end of a ten-year period (except in cases of extraordinary expiry of the insurance contract due to the death of the insured), the person liable for the tax, shall charge and pay the insurance contracts tax. The tax is assessed from the amount, which is paid to the insured in 15 days after the end of the month, in which the insurance has been cancelled.
4.0 PAYMENTS OF THE TAX ACCORDING TO THE INSURANCE TAX ACT FROM ABROAD TO SLOVENIA
The taxpayer can make the payment also via his/her bank as an international bank payment:
BANKA SLOVENIJE
SWIFT: BSLJSI2X
IBAN: SI56 (the number of payment subaccount)
SI stands for the Republic of Slovenia and 56 stands for the control number for the Republic of Slovenia. They are followed by the entry of payment subaccount, to which the payment shall be made, without spaces or separation marks. The number of payment subaccount is prescribed by the Rules on sub-accounts and the method of payment of compulsory charges and other general government revenues. The number for insurance contracts tax is: 011008881000030. At payment persons liable for tax shall put down the model into the reference number: 19 and then their Slovenian tax number and the code of the compulsory duty, which is for this tax: 70009. In this case the oldest obligation in connection with insurance contracts tax, which is due, will be covered.
The acquisition of the Slovene tax number and entry into the Tax register of the Republic of Slovenia is obligatory for taxpayers, so that they can start paying the settled tax on insurance contracts. Submission of the application to entry into the Tax register of the Republic of Slovenia is defined with the provision from Article 53 (entry of legal entities, associations of persons according to the foreign law, which are without legal personality, and other persons into the tax register) of the Financial Administration Act - ZFU . Rules on keeping and maintaining the tax register, define in Article 11 that the taxpayer from Article 53 of the Financial Administration Act - ZFU completes DR-04 form and submits the following documents to the tax body for checking or encloses:
- order about the entry into the register of companies or document about the entry into other register or records,
- identity card or passport or any other document, with which the person can prove its identity as a legal representative, who files the application,
- notice about identification and classification of units of the business register according to business activities, when the person shall (in accordance with the law which arranges the business register), be entered into the business register,
- documents, which are entered into the tax register, on which other data are based.
The tax body performs the entry into the tax register and assigns the tax number to the person liable for the tax if the application for entry is submitted with the prescribed contents with prescribed documents enclosed. The tax body issues in eight days a confirmation about the entry, on which the tax number is stated.
DR-04 form should be sent to the Special Financial Office - Large Business Office (the address is: Posebni finančni urad, Gospodinjska 8, 1001 Ljubljana, e-mail address: ) for the acquisition of the tax number and entry into the tax register.
Persons who entered into the tax register shall inform the competent financial office about all changes and additions to data, which are included into the application for entry into the tax register (e.g. change of the seat, change of the representative, date of deletion from the register or cessation of performing business activities etc.) in 15 days after a change occurs. When the change is reported or when data are supplemented, documents, on which data are based, which have been changed or supplemented, shall be enclosed with DR-04 form (e.g. official print from the register of the home country, from which the change is evident, which is reported). The financial office deletes the subject of entry from the tax register when the person ceases to exist and if this person's tax obligation no longer exists.
More information for foreign individual or legal entity registering for tax and applying for a tax number in Slovenia can be found on the following link:
http://www.fu.gov.si/en/taxes_and_other_duties/poslovanje_z_nami/entry_into_the_tax_register_and_tax_number/#anews
5.0 PENALTY
A penalty between EUR 4,000 and EUR 75,000 will be imposed on a taxable person who is a legal entity if that person:
· fails to calculate the tax and fails to draw up the tax return and fails to submit the monthly tax return to the tax authority;
· fails to pay the tax within the prescribed time limit.
A penalty between EUR 4,000 and EUR 125,000 will be imposed on a legal entity who is (in accordance with the law regulating corporations) considered as a middle or big corporation for committing an offence referred to in the preceding paragraph.
A penalty between EUR 800 and EUR 4,000 will also be imposed on the responsible person of the taxable person who is a legal entity for an offence referred to in paragraph (1) of Insurance Contracts Tax Act, ZDPZP.
For the offences penalty higher than minimum regulated in Insurance Contracts Tax Act, ZDPZP will be imposed in quick procedure.
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