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Glossary
International programmes

Insurance Premium Tax

Also: IPS · IPT · Insurance Premium Tax

Tax levied on the premium in the country where the risk is located, with different rates and taxpayers in each jurisdiction.

In practice

In Spain, the general rate is eight per cent. In an international programme, the tax is settled where the risk is located and not where the master is signed, and this is one of the reasons why the local policy exists.

Where it is addressed

This term is covered in Gestión del programa and applies when taking out Programas Internacionales.

Related terms

Premium surcharges and taxesAmounts added to the net premium by legal mandate: the insurance premium tax and surcharges in favour of the Consorcio de Compensación de Seguros.Premium allocationDistribution of the programme's total premium among the subsidiaries, based on their actual exposure to risk.Admitted local policyPolicy issued in the subsidiary's country by an entity authorised there, in accordance with its regulations and taxation.Cash before coverRule in force in several countries whereby cover does not commence until the premium has been effectively paid.DIC clauseClause of the master policy that covers the guarantees not included in the local policy, elevating the subsidiary to the group's standard.DIC ClauseClause of the master policy that completes the indemnity when the limit of the local policy is exhausted before the group's standard.
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