Parafiscal Taxes
In addition to IPT liabilities, insurers, captives and the insured are also liable to a host of additional taxes & surcharges, known collectively as Parafiscal Charges. A bewildering collection of Parafiscal Charges are due on insurance underwritten across Europe. These diverge hugely in type from country to country, are often payable to different tax and insurance authorities and can have varying deadlines.
Insurers should be cautious to ensure that none of the hidden liabilities are missed in those territories, mainly in Central & Eastern European countries (e.g. Poland, Hungary), that already had Parafiscal Charges in place prior to their recent accession to the EU.
Parafiscals are often separately administered from IPT, not only in a different division of the tax office but more often by different authorities altogether.
There are also deadline variations within particular territories from monthly declarations through to annual.
Common Parafiscal Charges are Fire Brigade Charge: payable on policies covering fire protection, Road Tax: chargeable on motor liability contracts, Local Insurance Institute: levied on many classes of insurance. Beyond this, in a number of countries there are a host of further charges reflecting national priorities, such as Social Security Fund on motor insurance (France), and Fund for Victims of Extortion (Italy).
