Effective 1 July 2023[1], any German IPT applicable to premiums received by Lloyd’s Syndicates will become the responsibility of the policyholder to administer. This change does not affect the administration of German IPT applicable to premiums received by Lloyd’s Insurance Company SA (Lloyd’s Europe), including risks transferred to them under Part VII, which will continue to be reported and paid by Lloyd’s Europe.
Since 1 January 2021, premiums received by Lloyd’s Syndicates have been treated as being received by a third country (non-EEA) “insurer” by the German tax authority. German IPT law states that it would generally be the responsibility of the German policyholder to report and pay any German IPT due on premiums paid to a third-country insurer. However, a specific provision in German IPT law (§10c VersStG-E) places a formal obligation on the part of the Lloyd’s General Representative in Germany (Hauptbevollmaechtigter) to assume IPT liability on behalf of the underwriters at Lloyd’s. Accordingly, Lloyd’s have continued to administer IPT instead of German policyholders.
Post-EU exit, , the German branch of Lloyd’s is no longer required and has been removed from the commercial register in Germany. As a result, Lloyd’s Syndicates no longer have a general branch representative in Germany and section 10c of the German IPT law (referenced above) can no longer apply.
Lloyd’s approached the German tax authority in 2021 and requested a binding ruling to allow any German IPT applicable to risks that will be written by Lloyd’s Syndicates to continue to be reported and paid by Lloyd’s. Following a period of protracted discussion, the German tax authority recently confirmed that this will not be possible. As such, from 1 July 2023 any German IPT applicable to premiums received by Lloyd’s Syndicates will become the responsibility of the German policyholder to administer. Please ensure that policyholders are informed of this change in process.
Should you have any questions regarding this matter, please contact Lloyd’s Tax Department at taxdept@lloyds.com
1 Subject to final confirmation from the German tax authority, as the new arrangements could apply from the date of branch closure.