Book contents
- Frontmatter
- Contents
- List of Tables, Figures, and Charts
- List of Cases
- Preface to the Revised Edition
- Value Added Tax
- 1 SURVEY OF TAXES ON CONSUMPTION AND INCOME, AND INTRODUCTION TO VALUE ADDED TAX
- 2 FORMS OF CONSUMPTION-BASED TAXES AND ALTERING THE TAX BASE
- 3 VARIETIES OF VAT IN USE
- 4 REGISTRATION, TAXPAYER, AND TAXABLE BUSINESS ACTIVITY
- 5 TAXABLE SUPPLIES OF GOODS AND SERVICES, AND TAX INVOICES
- 6 THE TAX CREDIT MECHANISM
- 7 INTRODUCTION TO CROSS-BORDER ASPECTS OF VAT
- 8 TIMING, TRANSITION AND VALUATION RULES
- 9 ZERO RATING AND EXEMPTIONS AND GOVERNMENT ENTITIES AND NONPROFIT ORGANIZATIONS
- 10 GAMBLING AND FINANCIAL SERVICES (OTHER THAN INSURANCE)
- 11 INSURANCE
- 12 INTERJURISDICTIONAL ASPECTS OF VAT IN FEDERAL COUNTRIES AND COMMON MARKETS
- 13 REAL PROPERTY
- 14 PROPOSALS FOR U.S. TAX ON CONSUMPTION
- APPENDIXES
- Index
11 - INSURANCE
Published online by Cambridge University Press: 06 January 2010
- Frontmatter
- Contents
- List of Tables, Figures, and Charts
- List of Cases
- Preface to the Revised Edition
- Value Added Tax
- 1 SURVEY OF TAXES ON CONSUMPTION AND INCOME, AND INTRODUCTION TO VALUE ADDED TAX
- 2 FORMS OF CONSUMPTION-BASED TAXES AND ALTERING THE TAX BASE
- 3 VARIETIES OF VAT IN USE
- 4 REGISTRATION, TAXPAYER, AND TAXABLE BUSINESS ACTIVITY
- 5 TAXABLE SUPPLIES OF GOODS AND SERVICES, AND TAX INVOICES
- 6 THE TAX CREDIT MECHANISM
- 7 INTRODUCTION TO CROSS-BORDER ASPECTS OF VAT
- 8 TIMING, TRANSITION AND VALUATION RULES
- 9 ZERO RATING AND EXEMPTIONS AND GOVERNMENT ENTITIES AND NONPROFIT ORGANIZATIONS
- 10 GAMBLING AND FINANCIAL SERVICES (OTHER THAN INSURANCE)
- 11 INSURANCE
- 12 INTERJURISDICTIONAL ASPECTS OF VAT IN FEDERAL COUNTRIES AND COMMON MARKETS
- 13 REAL PROPERTY
- 14 PROPOSALS FOR U.S. TAX ON CONSUMPTION
- APPENDIXES
- Index
Summary
INTRODUCTION
An insurance company is a financial intermediary whose main line of business is the sale of a particular type of contingent contract, called an insurance policy. Under this contract, [in return for the premium], the insurer promises to pay some amount to the policy-holder, or to some other beneficiary, following the occurrence of an insured event.
For VAT purposes, most countries lump together insurance and financial services rendered by financial institutions. The typical pattern is to include insurance within the definition of exempt financial services. There are some exceptions.
Israel taxes insurance companies under a system administered by the income tax department. The Israeli tax is calculated under an addition method that includes wages and profits but does not allow any deduction for VAT paid on business inputs. New Zealand taxes insurance other than life insurance under its Goods and Services Tax (GST). South Africa and some other southern African countries follow the New Zealand pattern of taxing property and casualty insurance on the margin between premiums received and claims paid. Australia also is taxing property and casualty insurance under its new GST but departs from the New Zealand approach with respect to input credits available to insurers on claims paid.
The following is a nonexclusive list of insurance-related transactions that may be taxed, zero rated, or granted exemption from tax.
- Type
- Chapter
- Information
- Value Added TaxA Comparative Approach, pp. 343 - 357Publisher: Cambridge University PressPrint publication year: 2007