26 August 2021

Stamp duty taxes on foreign insurance premiums – new form 12 FL

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  • Tax
  • Banking / Insurance

The federal stamp duty law is also applicable in the Principality of Liechtenstein pursuant to the Customs Union Treaty between Switzerland and the Principality of Liechtenstein. The payment of insurance premiums by a Liechtenstein policyholder to a foreign insurer may result in the Liechtenstein policyholder having to declare and pay the stamp duty taxes to the Swiss Federal Tax Administration (FTA). The FTA has recently made Form 12 FL available to Liechtenstein policyholders.

What is it about?

Insurance premiums from domestic insurers are subject to stamp duty insofar as the insurance is not covered by the statutory exemptions. For federal stamp duty legislation, the territory of the Swiss Confederation and the Principality of Liechtenstein are considered domestic. The stamp duty amounts to 5% of the cash premium or 2.5% of the cash premium for certain life insurance policies.

In the case of an insurance premium that is subject to stamp duty, the domestic insurer generally invoices the policyholder for the stamp duty and the insurer pays the stamp duty to the FTA. However, if the insurance contract is with a foreign insurer, the domestic policyholder has the obligation to declare the stamp duty in due time and pay it to the FTA (see also our article of March 2021).

In the case of a Swiss or Liechtenstein insurer, the stamp duty obligation generally lies with the insurer. If it is a foreign insurer, the Swiss or Liechtenstein policyholder has to check whether he becomes liable to stamp duty by paying the insurance premium.

Until now, there was only one form available for Swiss and Liechtenstein policyholders to declare the stamp duty to the FTA (Form 12).

Recently, the FTA published Form 12 FL, with which Liechtenstein policyholders must now declare any stamp duty on foreign insurance premiums and submit it to the FTA as the competent authority. Swiss policyholders subject to stamp duty will continue to submit the existing Form 12. In this way, the FTA would like to simplify internal processes and facilitate the declaration process for taxpayers in Liechtenstein.

Do you need any support?

As a Swiss or Liechtenstein company, do you pay foreign insurance premiums (for example, for insurance policies for the entire group) and do you need support in declaring or analyzing the insurance contracts from a stamp duty perspective? Please do not hesitate to contact us.