Paul Chater, Client Director (Insurers) and Alessia Mecozzi, IPT Administrator, travelled to San Marino on 23 & 24 April 2014 to meet the San Marinese IPT authorities. There is an interesting backdrop to San Marino. It is a tax haven and, as such, there have been concerns around money laundering in the territory. San Marino is aware that Italy and Europe view it with a degree of suspicion and hence the authorities and financial service providers must act, and be seen to act, in a proper and professional manner. This does not allow much scope to request, for example, an amnesty arrangement in respect of a missed first payment.
The meeting was very open and constructive and confirmed our understanding about the:
Role of the fiscal representative and what activities can be carried out in the UK and what activities can be carried out in San Marino
Filing the annual IPT return online
Settling the quarterly IPT payment
Administrative arrangements such as maintaining the IPT Book
Penalty and interest regime
Technical IPT points. For example, the tax point is the cash received date but is it the date the insurer receives the premium or, if an intermediary is used, the date the intermediary receives the premium on behalf of the insurer? With regard to co-insurance arrangements is it the Lead or the Lead and Follow that must settle the IPT?
The meeting also allowed us to agree an interim solution for our clients who had not registered for IPT but needed to make payment by 30 April 2014.
This ensured our clients remained compliant from the very beginning and, in turn, avoid penalty and interest charges. The penalty regime is tough in San Marino and carries high penalty rates. The tax authorities will impose a penalty of 100% to 200% for late payment based on the ‘behaviour’ of the insurer and an interest charge of 2% plus the San Marinese Central Bank’s interest rate, which is currently 2%. Thus, 4% at today’s rates. However, if payment is made within 30 calendar days of the payment deadline then the penalty rate is reduced to 25%.
The trip to San Marino also allowed us to conclude our arrangements with our local associates.
The meeting was a valuable investment of our time. FiscalReps demonstrated that it wants to work with tax authorities in a compliant manner that reflects the corporate governance requirements of our clients and, in turn, meet the legal requirements of the tax authorities. To this end we have developed a sound working relationship that should ensure any future concerns are addressed successfully.
Should you have any questions about the information above, please contact Paul Chater on e:
or t: +44 (0)20 7036 8070.