Handle Insurance Premium Tax to Tax Authority

This section is only relevant for you when your company is writing direct policies in countries where Insurance Premium Tax is applicable, and when your company decides to capture details about each Insurance Premium Tax rule within SICS under Country Deductions.

When this is the case, you can in addition to the Insurance Premium Tax from the Insured also handle the booking and payment of the Insurance Premium Tax to the Tax Authority within SICS. Based on the Inward Insurance Premium Tax details, SICS offers you an efficient way to automatically create the corresponding Insurance Premium Tax bookings to the relevant Tax Authorities.

Insurance Premium Tax to Tax Authority Terminology #

Inward Insurance Premium Tax means the Insurance Premium Tax received from the Insured.

Outward Insurance Premium Tax means the Insurance Premium Tax to be paid to the Tax Authority.

IPT means Insurance Premium Tax.

Tax Country means a Country that has at least one IPT rule.

Insurance Premium Tax to Tax Authority Preconditions and Principles #

Availability: The accounting order Generate Insurance Premium Tax to Tax Authority is only available for you when you have the access rights to perform the various steps for this order.

System Parameter: Your system administrator must have activated the System Parameter Enable IPT Functionality before the Inward Insurance Premium Tax details were booked, and also defined which Additional Classification type to be used for Class of Insurance/Risk.

Assumed Business: The Business parameter External Business Partner must be activated on the Assumed Business, else the business will not be considered when the system finds the Inward Insurance Premium Tax details for which corresponding Outward Insurance Premium Tax details have not been created.

Insurance Premium Tax rules: Your company must have defined relevant IPT rule(s) under Country properties Deductions and Tax Authority must be assigned to the rules.

Inward Insurance Premium Tax detail must have Tax Country and Tax Percent.

Entry Codes: Your system administrator must have decided which Entry Code to be used for the Outward Insurance Premium Tax bookings. The Entry Code must be a liquid one and defined within Entry Code Sub Category Outward Insurance Premium Taxes within Entry Code Category Non-Technical. Further the Entry Code must be linked to the Accounting Calculation Outward Insurance Premium Taxes within the Accounting Function Automatic Outward Insurance Premium Tax.

Outward Insurance Premium Tax detail: The Outward IPT detail gets most of its values copied from the corresponding Inward IPT detail, except for:

• The Worksheet Title is set to IPT OUT
• Worksheet Origin is set to IPT Out
• The amount has the opposite sign as the Inward IPT amount
• The Entry Code (see above under Entry Code)
• The Booking Date is set to the date when the Worksheet with the Outward Insurance Premium Tax detail is created.
• Booking Year and Period is taken from the Default open Booking Period for the Base Company that holds the corresponding Inward Insurance Premium Tax detail.
• Received External Date is same as Booking Date
• Received Internal Date is empty. But only applicable when the Base Company Specific System Parameter Is Received Internal Date On Worksheet In Use is activated.

Worksheet with Outward Insurance Premium Tax detail:

• Is closed automatically when the system can assign Tax Authority applying any of the rules described below

• Is left in status OPEN for manual assignment of Tax Authority as Business Partner when this cannot be done by the system

• One worksheet per Assumed Business

• One Balance per detail Detail Pairing: The Outward Insurance Premium Tax detail is paired against the corresponding Inward Insurance Premium Tax detail.

• The Detail Notes of the Outward IPT detail is updated with the worksheet identifier of the source Inward IPT detail.

• The Detail Notes of the Inward IPT detail is updated with the worksheet identifier of the target Outward IPT detail.

Business Partners on the Outward IPT Balance:

• Business Partner: Tax Authority
• Responsible Business Partner: Insured
• The Tax Authority is assigned automatically by the system according to the following rules: Rules for assigning Tax Authority to the Outward IPT Balance: The Tax Authority must be pre-assigned to one or more IPT Rules within Country properties Deductions. To find the right Tax Authority that shall be assigned to each Outward IPT detail, three different rules apply in a fixed sequence. Rule 1 is used first, then Rule 2 and last Rule 3. If the system cannot find the Tax Authority applying any of the rules, the Inward Insurance Premium Tax detail(s) is (are) ignored with the result that no corresponding Outward IPT detail is created.

The rules are:

• Rule 1 which is only applicable when the Inward Insurance Premium Tax detail is automatically booked, either together with the Instalment or from the Insurance Premium Tax condition. To find the right IPT rule, the system uses:
• The Tax Country from the Inward IPT detail
• The Class of Insurance/Risk from the Insurance Premium Tax line (within the Insurance Premium Tax Condition) for the Inward IPT booking detail
• Level of Business, Type of Business, Base Company and Insured Period from the Assumed Business
• Rule 2: For all the Inward Insurance Premium Tax details that the Tax Authority could not be found using Rule 1, the system searches through all the Insurance Premium Tax rules for the Tax Country on the Inward Insurance Premium Tax booking detail. When all the Insurance Premium Tax rules for the Tax Country have the same Tax Authority, this Tax Authority is used and assigned to the Outward IPT detail.
• Rule 3: For all the Inward Insurance Premium Tax booking details that the Tax Authority could not be found applying Rule 1 or Rule 2, the system finds the Insurance Premium Tax rule that matches the combination of Tax Country and Tax Percent on the Inward IPT booking detail.
• When there is more than one Insurance Premium Tax rule that matches the combination of Tax Country and Tax percent and the Tax Authority assigned to all these Insurance Premium Tax rules are the same, this Tax Authority is used.
• When there is more than one Insurance Premium Tax rule that matches the combination of Tax Country and Tax Percent and the Tax Authority assigned to these Insurance Premium Tax rules is not the same, the system does not assign Tax Authority to the Outward Insurance Premium Tax detail.
• Blank Tax Authority is considered as a value. This means: If one or more of the matching Insurance Premium Tax rules has Tax Authority, and one or more does not have Tax Authority, this is treated as different values, and the system cannot assign Tax Authority to the Outward IPT detail.

Book Insurance Premium Tax to Tax Authority #

Create a Generate Insurance Premium Tax to Tax Authority accounting order:

1. Open the Find Accounting Order folder and click the Create New button or right click and select New. Select order category Insurance Premium Tax to Tax Authority and then the order type Generate Insurance Premium Tax to Tax Authority and click the OK button.
2. Select the Base Companies
3. Select the Tax Countries
4. From the pop-up menu select List Details
5. Record the Title if you want
6. Click the OK button

Select the Base Company (or companies) to be included in the current order:

1. Under Extraction Criteria, select the type Base Company. Right click and select Edit.
2. Select the Base Company (or companies) from the list and click the Save button.

Select the Tax Country (or countries) to be included in the current order:

1. Under Extraction Criteria, select the type Tax Country. Right click and select Edit.
2. Select the Tax Country (or countries) from the list and click the Save button.

The list of available Tax Countries is limited to those countries that have at least one Insurance Premium Tax rule.

List Inward Insurance Premium Tax details: When you select List Details, the system displays a list of all the Inward Insurance Premium Tax details that do not have a link to a corresponding Outward Insurance Premium tax detail. However, the list is limited to Inward Insurance Premium Tax details which:

• Have a Base Company and Tax Country that are among the included Base Companies and Tax Countries.
• Are linked to an Assumed Business for which the Business parameter External Business Partner is selected. Clear List of Inward Insurance Premium Tax details: If you want to start from the beginning and list the Inward Insurance Premium Tax details, the system lets you do that in an easy way.

1. Without selecting any detail, right click and select Clear List

This will, however, only remove all the listed Inward Insurance Premium Tax detail. The Extraction Criteria will not be re-set.

Exclude an Inward Insurance Premium Tax Detail: You can exclude one or more of the listed Inward Insurance Premium Tax details from the current order.

1. Select the Inward Insurance Premium Tax detail (or details) that shall be excluded.
2. Right click and select Exclude Selected

The details are removed from the order when you click the OK button.

Revoke an excluded Inward Insurance Premium Tax Detail: Before you click the order’s OK button, you can re-include an Inward Insurance Premium Tax detail that is marked to be excluded.

1. Select the Inward Insurance Premium Tax detail (or details) that has Included = No.
2. Right click and select Include Selected

Open the Business of the Inward Insurance Premium Tax Detail: From the list of Inward Insurance Premium Tax details, you can open the business for a specific selected Inward IPT detail.

1. Select the Inward Insurance Premium Tax detail.
2. Right click and select Business Properties.

Run a Generate Insurance Premium Tax to Tax Authority accounting order: Your can either run the order online or you can create a scheduled job for the order

To run the order online:

• Click the order’s menu button and select Run Now

To create a scheduled job for the order:

• Click the order’s menu button and select Request Scheduled Job

Inspect the Worksheets and the Balances and Details #

You can inspect the worksheets with the Outward IPT balances and details from the Generate Insurance Premium Tax to Tax Authority order.

• To see the list of worksheets:
• Select Worksheet from the menu button. The system opens the View Worksheet where all the new worksheets are listed.
• To inspect the balances of a worksheet:
• Within the View Worksheet window, select a worksheet, right click and select View Worksheet. The system opens the Worksheet Closing window for the selected Worksheet.
• To inspect the details of a Balance:
• Within the Worksheet Closing window, select a balance, right click and select View Balance Details. The system opens the View Balance Detail window. In the Detail Notes column you can see the worksheet identifier of the source Inward IPT detail.
• To inspect the Business Partners assigned to the Outward IPT balance:
• Within the Worksheet Closing window, select a balance, right click and select More Balance Information. The system opens the Balance Properties window.

Assign Tax Authority to an Outward IPT Balance #

When the system cannot assign Tax Authority applying any of the Rules described above in 12.19.2, open worksheets are created. You can then assign the Tax Authority manually.

1. Select Worksheet from the order’s menu button.
2. In the View Worksheet window, select the open Worksheet, right click and select View Worksheet. The system opens the Worksheet Closing window.
3. In the Worksheet Closing window, select the Balance, right click and select More Balance Information. The system opens the More Balance Information window.
4. In the More Balance Information window, select the menu button at the bottom right side. The system opens the window in edit mode.
5. Click the magnifying glass to the right of the Business Partner field. The system opens the Find Business Partner window.
6. Select the Business Partner and transfer it to the Balance. Important: The system does not validate that the selected Business Partner is a Tax Authority.

The Inward IPT Details Display List #

When you select List Details, the system displays a list of all the Inward Insurance Premium Tax details that do not have a link to a corresponding Outward Insurance Premium Tax detail. The list is limited to Inward Insurance Premium Tax details which have a Base Company and Tax Country that are among the included Base Companies and Tax Countries. For each Inward Insurance Premium Tax detail, you see the following information: