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IR4 Question 22 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 22. Print the gross amount of premiums paid to Switzerland in Box 22A. Deduct the figure in Box 22A from Box 22 and multiply the net amount by 0.1 (10%). Print your answer in Box 22B and copy this amount to Box 30.

No other income should be returned as an agent for an overseas insurer.

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

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