INSURANCE PREMIUM TAX
Insurance Premium Tax is charged on the receipt of a premium by an insurance company. The tax collected on the premium income of an insurance company includes both Life and General Insurances.
TAX ON INCOME PREMIUM OF INSURANCE COMPANIES
In addition to tax paid on the income of a company, insurance companies must pay taxes to the Department on the “premium income” for every income year it is considered carrying on insurance business. This premium income entails companies that carry on both life and general insurances.
A company shall be considered to be carrying on insurance business even if it “has ceased to issue contracts of insurance” if it continues to collect premiums on existing insurance contracts.
In addition to insurance companies, insurance agents of foreign insurance companies shall also “deduct or withhold an amount from the premium income” of that foreign company and must pay that amount to the Department by the 15th day of each and every month that follows the month in which that premium income was earned.
The insurance premium income on which the tax based is calculated by taking the gross premiums received by the insurance company within Saint Lucia and deducting there from any premiums received or paid in respect of reinsurances.
LIFE INSURANCE PREMIUM TAX RATES
The tax rates payable by an insurance company carrying on life insurance business is as follows:
- For a resident insurance company, 1½ percent(1.5%) of the premium
- For a foreign insurance company, 3% of the premium income
GENERAL INSURANCE PREMIUM TAX RATES
The tax rates payable by an insurance company carrying on general insurance business is as follows:
- Three percent (3%) of the gross premium of a resident insurance company
- Five percent (5%) of the gross premium of a foreign insurance company
The insurance premium tax must be paid to the Department by the 15th of the month that proceeds the month on which the tax was collected. This includes insurance premium taxes received by agents.