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A local council has enquired whether it must pay the increased Insurance Premium Tax rate, rising from 6% to 8%, on current insurance contracts. The Directorate-General for Taxes (DGT) has ruled that the Administration is obliged to bear the rate in force at the time the tax liability arises.
This ruling clarifies that any increase in insurance tax rates applies immediately to ongoing administrative contracts, as the tax is determined at the time of accrual, regardless of when the contract was originally signed.
The tax team reviews your specific situation.
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