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:
- 1 March 2008: increase from 7% to 7.5%
- 1 January 2011: increase to 9.5%
- 1 March 2011: increase to 9.7%
- 1 January 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 premium tax:
- Transport insurance
- Reinsurance
- Insurance related to death, life or well-being of human beings, such as disability insurance, health insurance and life insurance.
Insurance tax through 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 companies, the VAT paid is often deductible. Insurance tax, however, is not tax deductible.
New insurance taken out before 1 January 2013. Does the increase also 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 is not possible due to increase in insurance premium tax
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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