Insurance Premium Tax

Insurance Premium Tax (IPT), similar to Value Added Tax (VAT) is a tax applied by the government on insurance premiums. There are two rates of IPT, depending on the type of product covered by the insurance:

  • a standard rate of 12%
  • a higher rate of 20%, for:
    • travel insurance
    • certain insurance when sold with mechanical/electrical appliances
    • certain insurance when sold with some motor vehicles

Mobile phone insurance is subject to the standard rate of 12% because mobile phones are classified predominantly as a communication device. However, connected device insurance is subject to the higher rate of 20% because tablets and other connected devices are considered ‘electrical domestic appliances’ and not primarily a communication device.

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