Nieuws Maatschappijen

Spain

This communication is to advise the Lloyd’s Market of an increase to the rate of Spain Insurance Premium Tax (IPT) to 8%.

The standard rate of Spain (incl Navarra, Alava, Guipuzcoa and Vizcaya) IPT has increased from 6% to 8% with effect from 1 January 2021.  This announcement comes following the publishing of Article 73 Law 11/2020 in the Spanish Official State Gazette on 30 December 2020.  No transition period has been provided. 

 The new rate of IPT will apply to all new business, renewals and additional premiums processed on or after 1 January 2021, irrespective of when the policy incepted, or the premium adjustment was effective from.  For premium processed via instalments, the new rate of IPT will apply to all instalments of the premium processed on or after 1 January 2021.  Return premiums should be processed using the tax rate applied to the original premium being adjusted.

 Due to the short notice of this rate increase, Lloyd’s will continue to allow business to be processed at the old rate of IPT (6%) until 1 March 2021 to accommodate any in-flight risks/bordereaux with IPT charged at the old rate.  During this period, underwriters will fund any shortfall in tax so that the correct tax is paid to the Spanish tax authority.

 Any premiums submitted for processing after 1 March 2021 with the old rate of Spanish IPT applied will be queried by Xchanging, leading to potential delays in premium being paid.

 If you have any questions or require any further information, please consult the Spain tax pages of Lloyd’s Crystal or contact Lloyd’s Tax Department.