Return of Payments (Insurance Undertakings) Regulations 2011
The Irish Revenue Commissioners have made regulations entitled the ‘Return of Payments (Insurance Undertakings) Regulations 2011’ which provide for the automatic annual electronic reporting by Assurance companies of payments made in respect of certain investment policies. The regulations will apply in respect of the tax year 2011 and all subsequent years.
The regulations require that an assurance company that makes a relevant payment in respect of an investment must file a return of the aggregate of all such payments made within the tax year concerned. An investment is defined in the regulations as a policy with an insurance undertaking which has acquired a surrender value. Permanent health insurance and pure protection policies which do not acquire a surrender value (e.g. mortgage protection policies) are outside the scope of these regulations.
Broadly, any payments made by an Assurance company (as defined by the Regulations) in respect of investment policies are within the scope of the regulations unless the payment constitutes an excepted payment.
The regulations provide for certain exclusions to the reporting obligations.
Excepted payments include payments to non-Irish resident policyholders where the Assurance company holds an Life Assurance Exit Tax Non-Resident Declaration. Therefore, broadly, international insurers based in Ireland should only be affected if they have Irish resident policyholders. In addition, Revenue have confirmed that Insurers carrying on business out of Ireland on a Freedom of Services basis are not subject to these regulations if they have received written approval from Revenue not to deduct Life Assurance Exit Tax.
Payments relating to certain instruments, such as certificates of deposit, commercial paper or medium term notes, are excluded provided certain conditions are met.
In addition, payments to certain Irish resident policyholders are also disregarded for reporting purposes which include, for example, payments made to pension schemes, approved retirement funds, resident banks or building societies and NAMA. Payments by branches outside the State are also excluded.
Return of Payments
Specific information is to be captured in the reporting required under these Regulations and the Revenue have issued guidance on the format of the report.
Information to be included in respect of the assurance company includes the company name, address of registered office, tax reference number and contact details.
The type of information to be captured in the report in respect of the payee includes, for example, the name and address of the payee, the date of birth (if an individual) and the registered office (if a company).
In addition, please note that for any relevant payments made in respect of new investments made on or after 1 January 2013, the assurance company will also be required to make all reasonable efforts to obtain the payee’s tax reference number, or in the case of a charity the CHY number. Therefore, application forms for opening new investments should provide for the tax reference number and documentation must be obtained from the customer to verify the tax reference number.
The relevant payment details to be reported should include the relevant payment (or aggregate of payments made in the year) in respect of each policy together with the policy number or in the absence of a policy number, information capable of identifying the investment.
The returns are due for submission with Revenue as follows:
- In respect of the year 2011: 30 September 2012
- In respect of 2012 and subsequent years: 31 March in the following year, for example, 31 March 2013 in respect of the year 2012.
From a practical perspective, it is important that all assurance companies identify which policies and payments are within the scope of the regulations. It will also be necessary for assurance companies to consider whether they have systems in place which can provide the required information required under these Regulations.
Tel: + 353 1 417 2205
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Peter Mc Geoghegan
Tax Senior Manager
Tel: + 353 1 417 2293