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Finland: Insurance premium tax; question on location of risk

Finland: Insurance premium tax; location of risk

A court in Finland has requested that the Court of Justice of the European Union (CJEU) provide a preliminary ruling on the location of risk for insurance premium tax purposes.


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The case is: A Ltd (C-74/18) 

The case concerns insurance policies for merger and acquisition (M&A) transactions. 

The taxpayer, an insurance company, offers insurance products and has its head office in the United Kingdom. The insurance company is active in Finland, but does not have a separate physical branch there. The insurance company offers insurance products to its clients, including an insurance policy for business acquisitions.

The matter primarily concerns a warranty and indemnity insurance policy taken out by the vendor, a warranty and indemnity insurance policy taken out by the purchaser, and an insurance policy for tax liability. The insurance policies are intended to cover the risk associated with the value of the shares and the right to insure the purchase price paid by the purchaser when certain predetermined circumstances occur.

The CJEU judgment could affect many types of cross-border insurance policies—in particular in instances when these insurance policies also cover the shareholder.


Read an April 2018 report prepared by the KPMG member firm in the Netherlands

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