IR4 Question 20 Insurance premiums paid to an overseas insurer
Special rules apply to any company paying a premium, including a reinsurance premium, to a non-resident insurer.
If you’re paying a premium to a non-resident insurer you need to get a separate IRD number to account for the tax on the premium income. This is because you’re considered to be the insurer’s agent.
You will need to file an IR4 return under this separate IRD number and declare premiums paid as the only income received.
Only 10% of the total gross premiums paid to overseas insurers is subject to the company tax rate of 28%. This equals 2.8% of the total premiums paid. Any premiums paid to insurers in Switzerland aren’t subject to tax in New Zealand and should be deducted from the total gross premiums paid.
Agency obligations also extend to other New Zealand residents, for example, brokers, who may initially collect premiums for payment to the non-resident insurer. If there is any default, the insured person is responsible for the tax.
Print the gross amount of premiums paid to a non-resident insurer in Box 20. Print the gross amount of premiums paid to Switzerland in Box 20A. Deduct the figure in Box 20A from Box 20 and multiply the net amount by 0.1 (10%). Print your answer in Box 20B and copy this amount to Box 28.
The company still needs to declare other income under its original IRD number.
If you have any enquiries, contact:
Large Enterprises Services
Investigations and Advice
Private Bag 39984
Wellington Mail Centre
Lower Hutt 5045
Phone 0800 443 773