Tax is the one certainty all businesses face. Insurance companies are no different, being liable to a full range of taxes with further complications from the nature of the business they undertake. We have specialists in all areas of tax, and they are able to identify a business’ needs and provide practical advice.

Current market challenges

Base Erosion and Profit Shifting 2.0 is a potentially significant development in how international groups will be taxed, whilst the outcome is unknown there could be a wide-ranging impact. In particular, the proposed minimum tax rate could influence the insurance industry, especially those insurers who are currently reinsured to lower tax rate territories. With the UK tax authorities consulting on the introduction of more onerous requirements around the provision of Transfer Pricing documentation and the real risk of a new set of tax computations for Pillar 2, this is one to watch carefully.

IFRS 17 is the new accounting standard for insurance contracts and will have an impact on how the tax base is calculated for IFRS reporters, both in transition and into the future.

The UK has stepped up its efforts on enforcing good tax governance onto large corporates with its Senior Accounting Officer, Country by Country Reporting, and Corporate Criminal Offence legislation. It is also set to introduce laws requiring a company to report its uncertain tax positions to the tax authority.

All these laws have one thing in common, they place a burden on the taxpayer to provide information and assurance to the tax authority.

This is on the back of Brexit and the massive change to how international insurance groups had to structure their operations to comply with the new regulatory requirements.

Altogether, complying with the tax requirements is taking up an increasing amount of time in all organisations.

How we can help

We have dedicated specialists in every area of taxation who focus on the specific needs of the insurance industry. Providing the full range of direct, indirect, and international taxation, we are well placed to provide holistic advice to their clients, whether you are looking for restructuring advice, a transfer pricing model, or annual compliance we have an experienced team ready to meet your needs.

As a globally integrated firm with a wide-ranging international reach, we provide tax advice to many international groups covering multiple jurisdictions.
We understand that management time is limited and you want pragmatic practical advice from your trusted advisors who work with you to reduce the burden of complying with the requirements imposed by tax law, effectively managing the company’s risk and optimising the company’s tax position.

Our team of tax specialists regularly works with other specialists, from both tax and other services lines, to ensure that any project we are working on has considered the potential impacts across the board. In particular, we are used to advising on tax, capital, regulatory, and accounting impacts in association with the risk and governance implications of any changes that your business intends to make. This way we ensure that all the advice we give meets the needs of the business.

Case study

We were instructed to undertake a full tax risk review of an insurance group, with a view to preparing for an exit event. As part of this, our team analysed the group’s current position over a wide range of taxes:

  • Corporation Tax
  • VAT & IPT
  • Transfer Pricing Model
  • Diverted Profits Tax
  • Tax Governance

After undertaking a detailed analysis, several areas in which improvement could be made were identified. Our Tax team worked with our client to explain the position to the board of directors and from there provided support in the identified areas where action was considered necessary to be taken. This included:

  • Implementing a new Transfer Pricing model designed to meet the client’s needs whilst remaining compliant with the OECD requirements.
  • Assisting with the wording and design of the client’s policy documentation to ensure the IPT position was optimised.
  • Providing training sessions to the client on the areas where additional support was identified.

This culminated with two members of staff being placed on secondment to help embed the changes we had advised and handover to the new Head of Tax who was appointed.


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