Versicherungssteuer......... and how to evade it.

Versicherungssteuer......... and how to evade it.

19% "Insurance Premium Tax" (IPT) is a lot to pay on top of an insurance premium.

So imagine that you were a ‘German resident’ ship-owning or ship management company  that had to arrange insurance ship's crew accident insurance for, say, eighty medium sized general cargo vessels. For arguments sake let's estimate a yearly premium of EUR5000.  That would give a total bill of EUR400.000 and would attract  IPT of EUR76.000 pa.

Over ten years at the same rates you would have to pay EUR 760.000 in IPT !!!

But if one had a convenient non-German, or even 'Offshore' vehicle, one could perhaps arrange for the insurance policy to be subscribed to by that entity and thus avoid the 19% IPT. If premiums needed to be recovered by the offshore company they could simply be included in any transfer pricing arrangements with the German resident company(ies).

Now that's a good idea.

And that is exactly what happens with Briese Schiffarhts and ITCC. By channelling a large part of their insurance premiums via the 'offshore' ITCC (and before that ESC-European Shipping and Chartering Ltd, also of Nevis), Briese Schiffahrts has managed to 'get around' having to pay in the region of EUR1.000.000 in IPT.