SLOVAKIA: The newly announced IPT, in force since 1 January 2019

The new 8% Insurance Premium Tax (IPT) has come into force since January 1st, 2019 in Slovakia, thus putting an end to amore than one year long debate.

This initiative was harshly criticized by the local insurers in unison, saying that the prices for policies will grow significantly, while the Ministry of Finance kept claiming that insurers have enough resources to absorb, at least partially, this new tax while keeping the premiums' evolution at decent levels.

The new law replaces the 2017 Premium Levy and applies in several conditions:
  • to non-life insurance segments only, excluding the MTPL which is taxed differently (also the reinsurance is not subject to tax);
  • the risk is related to Slovak territory (e.g. the insured properties are located inside the country's borders, the vehicles are registered in Slovakia or the insured person/entity has the residence in Slovakia);
The tax rate's level is 8% from the tax base. The cost of the tax is supported by the final consumer (the insurer's job is to collect the IPT and direct it to the authorities).

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