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Online IR4 2004

Help IR4 2004 - Insurance premiums paid to an overseas insurer

There are special rules applying to any company paying a premium, including a reinsurance premium, to a non-resident insurer.

If you are paying a premium to a non-resident insurer you need to obtain a separate IRD number to account for the tax on the premium income. This is because you are deemed 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 33%. This equals 3.3% of the total premiums paid. Any premiums paid to insurers in Switzerland or the Netherlands are not 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, such as brokers, who may initially collect premiums for payment to the non-resident insurer, but 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 19. Print the gross amount of premiums paid to Switzerland or the Netherlands in Box 19A. Box 19A will be deducted from Box 19 and the difference multiplied by 0.1 (10%) and entered in Box 19B.

There should be no other income 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:

Business Services
Banking and Insurance
PO Box 2198
Wellington

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Date published: 02 Dec 2004

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