The expected new tax due on Motor Third Party Liability Premiums is being introduced by Luxembourgish tax authorities with effect from 01 October 2016. The 3% rate will apply on premiums covering Motor Third Party Liability related to vehicles registered in Luxembourg and should be borne by insurers.
 
Unlike IPT and FBT, the deadline to file this new tax is 15 days following quarter end, the first return (whose template has not been disclosed yet) will be due by 15 January 2017. The tax point, premium received date, will be in line with IPT and FBT though.
 
The introduction of the tax was initially planned for 01 January 2016, but was delayed to 01 October 2016. The aim of the tax is to increase the financing of the local Emergency and Rescue Services, with an objective of collecting an additional annual EUR 5,610,000 (based on Motor Third Party premiums written in 2011).
 
It is worth noting that insurers writing under Freedom of Services regime do not have the obligation to appoint a fiscal representative domiciled in Luxembourg, this obligation being applied only to foreign insurers not writing under Freedom of Services.
 
For further information on any of the above issues, please contact: Christophe Bourdaire at christophe.bourdaire@fiscalreps.com