What is insurance tax?

The insurance tax is levied on the premium (including policy fees). It is usually collected and remitted by the insurer.

Certain types of insurance are exempt from insurance tax:

• Transportation Insurance
• Reinsurance
• Insurance policies related to death, life, or human well-being, such as disability insurance, health insurance, and life insurance.

Is the insurance tax deductible?

For businesses, VAT paid is often deductible. Insurance tax, however, isnot tax-deductible.

I took out a new insurance policy before January 1, 2013. Does the rate increase apply to me as well?

If the effective date of your insurance policy is January 1, 2013, or later, the new rate of 21% applies. Is the effective date of your insurance policy in 2012? In that case, you’ll start out at the old rate. Please note: If you pay monthly, you’ll pay the higher rate right away in January.

It is not possible to switch insurers due to an increase in insurance tax

You cannot cancel your insurance policy due to an increase in the insurance tax. This is because it is not a premium increase. You will pay more, but the premium charged by the insurer remains the same. However, you can cancel insurance policies that have been in effect for more than 12 months at any time.