6 October 2014
Motor insurance is one of the most important sectors of insurance in Greece, with a market share in 2012 of 35.4% of the total premium income and 63.2% of the premium income for loss or damage insurance. There are three main taxes or levies payable, on liability, fire, and other risks (excluding fire), and taxes are paid to three separate bodies.
Insurance Premium Tax (IPT) is the first with the rates being 10% (and 20% for fire etc.) which is paid to the competent Tax Office.
Apart from IPT, there is also the TEA EAPAE (Occupational Insurance Fund of Insurers and Personnel of Insurers Companies) with a contribution rate of 2%. The TEA EAPAE grants additional pension to all employees. The insured is not subject to this tax which is paid directly by insurers. It is proposed that TEA EAPAE will be abolished before the end of this year.
The third tax that motor insurance companies need to pay is the MGF (Motor Guarantee Fund) which takes a contribution of 6% calculated on the registered gross premiums for third party liability insurance related to cars. 70% of this is paid by insurance companies and 30% respectively by the insured from 2 January 2013. The subscription of a new member to the Fund amounts to EUR 50,000, and the minimum annual contribution of every member, irrespective of the level of gross premiums, amounts to EUR 10,000.
In addition, motor insurance companies still need to pay the 0.6% contribution of the TEO, described as such on invoices. TEO as a body was abolished on 26 March 2014, but previously there was a contribution of 1% of the net premiums of the auto industry. 0.4% was apportioned in favour of the TEO and 0.6% was paid to the MGF. The 0.4% is no longer chargeable as the TEO no longer exists, but the 0.6% remains payable to the MGF even though it may still be charged as “TEO”.