Text file: 4632.txt
author: noel66
downvotes: 1
end consideration date: 2013-06-13
id: '4632'
number comments: 38
number views: 7352
proposal type: Competent authority response
response: "Response from the Ministry of Finance\nThe services of insurance brokers\
  \ and agents, for which commissions are paid, have been included in the taxation\
  \ under the FSCA, as is the case for all other financial intermediation services\
  \ for which a commission is charged. Until the entry into force of the PIFA, the\
  \ services of insurance brokers and agents were not subject to any indirect tax.\
  \ The Ministry of Finance maintains the solution adopted and will not propose to\
  \ exempt insurance intermediaries and agents from taxation under the ITA.\nInsurance\
  \ services are defined as financial services in the Banking Act (Official Gazette\
  \ of the Republic of Slovenia, No 99/2010-UPB5 (52/2011 am.), 9/2011-ZPlaSS-B, 35/2011,\
  \ 59/2011, 85/2011, 48/2012 and 105/2012). For this reason, they should be treated\
  \ in the same way as other financial intermediation services from the point of view\
  \ of the FTT and are therefore also included in the scope of taxation under the\
  \ FTT.\nThe request for amendment of the FFSA states that the Legislative Legal\
  \ Service of the National Assembly opposed the taxation of insurance agency companies,\
  \ which is not the case. In its Opinion No 434-02/12-6 of 16.11.2013, the Legislative\
  \ Legal Service of the National Assembly stated that it is only the inclusion of\
  \ the taxation of the services of insurance agents and intermediaries in the ZDFS,\
  \ but not the taxation of these services themselves, that is legally and systemically\
  \ questionable. For this reason, the Ministry of Finance insisted that the services\
  \ of insurance brokers and agents, for which commissions are paid, should be included\
  \ in the scope of the financial services tax, in the same way as all other intermediation\
  \ services in the provision of financial services.\nThe FFSA regulates an area which\
  \ is not yet explicitly covered by the EU acquis. However, in drafting the FTTF,\
  \ the Ministry of Finance has respected the fundamental freedoms of the EU and the\
  \ limitation imposed by Council Directive 2006/112/EC of 28 November 2006 on the\
  \ common system of value added tax (OJ L 347, 11.12.2006, p. 1, as amended; hereinafter:\
  \ the 'VAT Directive') in Article 401 on the levying of specific sales taxes. According\
  \ to that provision of the VAT Directive, Member States may impose taxes on particular\
  \ goods or services provided that the tax imposed does not constitute a general\
  \ sales tax and that the tax does not require any special formalities to be complied\
  \ with in respect of the crossing of frontiers in the course of trade between Member\
  \ States.\nThe ZDFS fully complies with the criteria set by the VAT Directive for\
  \ the introduction of sales taxes and is therefore not contrary to EU law.\nThe\
  \ introduction of the financial services tax has not led to double taxation of commissions\
  \ charged by insurance agents to each other for insurance services rendered.\nThe\
  \ subject matter of taxation in the FATF and in the Insurance Transaction Tax Act\
  \ (Official Journal of the Republic of Slovenia, No 96/2005; hereinafter: 'ITTPA')\
  \ is not the same. According to Article 6 of the ZDPZP, the basis for the levy of\
  \ the insurance transaction tax is the insurance premium or contribution paid on\
  \ the basis of an insurance contract. Article 3(e) of the IAA provides that the\
  \ services of insurance brokers and agents are subject to taxation, and according\
  \ to Article 6(1) of the IAA, the taxable amount is the remuneration or commission\
  \ received by the taxable person as a payment in respect of the service rendered.\
  \ The insurance premium is charged by the insurance company, while the insurance\
  \ agent charges the insurance company a commission for the representation or brokerage\
  \ service provided.\nTherefore, only the commission of the insurance agent is subject\
  \ to taxation under the ITA, and not the insurance premium charged by the insurance\
  \ company and taxed under the ITA. The method of calculating the commission is a\
  \ matter of the commercial policy of the insurance company, and the shifting of\
  \ the tax burden is a matter of the commercial arrangements of the entities involved\
  \ in the transaction.\nIn their request for amendment of the FSCA, the insurance\
  \ agents also point to possible concerted behaviour by the banks in the price increases\
  \ made by the banks at the time of the introduction of the financial services tax.\
  \ The insurance agents should report any possible concerted behaviour to the Public\
  \ Agency for the Protection of Competition, which identifies and sanctions infringements\
  \ of competition law.\n "
response date: 2013-06-26
response due date: null
sent date: 2013-05-15
title: Request for amendment of the Financial Services Tax Act
upvotes: 129
url: https://predlagam.vladi.si/predlog/4632
