What is insurance tax?
Insurance tax is the tax you have to pay on the premium and cost of your insurance. For most non-life insurance, including auto insurance, it is 21%.
Often increased in the past 5 years
The government has increased the insurance tax many times in the past 5 years. Below is an overview of the dates and increases:
- March 1, 2008: increase from 7% to 7.5%
- Jan. 1, 2011: increase to 9.5%
- March 1, 2011: increase to 9.7%
- January 1, 2013: increase to 21%
Insurance tax is levied on the premium (including policy fees). It is usually levied and remitted by the insurer.
A number of insurance policies are exempt from insurance tax:
- Transport Insurance
- Reinsurance
- Insurance related to death, life or human welfare, such as disability insurance, health insurance and life insurance.
Insurance tax over the years
| Year | Insurance tax |
|---|---|
| until 01-03-2018 | 7% |
| until 01-01-2011 | 7,5% |
| until 01-03-2011 | 9,5% |
| until 01-01-2013 | 9,7% |
| present | 21% |
Is the insurance tax deductible?
For businesses, VAT paid is often deductible. However, insurance tax is not tax deductible.
Purchased new insurance before January 1, 2013. Does the increase already apply to me?
If the insurance effective date is January 1, 2013 or later, the new 21% rate applies. Is the effective date of your insurance in 2012? Then you start with the old rate in any case. Note! With a monthly payment, you pay the higher rate immediately in January.
Switching due to insurance tax increase not possible
It is not possible to cancel your insurance when there is an increase in the insurance tax. This is because it is not a premium increase. You will pay more but the premium charged by the insurer remains the same. Insurances that run for more than 12 months can be cancelled at any time.
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