to be taxed at ten percent
Decision needs more clarification
according to insurance association
The Ministry of Finance has issued a decision to tax profits and revenues from life policies. The tax is set at ten percent.
The tax should be paid one month following profit registration or distribution. The decision does not include heirs of the policyholder. Heirs are subject to an accession tax.
Carla Abdo, Chairperson of the Life Committee at the Association of Insurance Companies (ACAL), said: “This decision is unclear and might create problems between the tax administration and insurance companies.”
She said that the uncertainty is in when the tax should be paid.
“The way the decision is written calls for misinterpretation,” she said.
The decision also fails to specify whether the tax is calculated before or after deducting the life risk. Life insurers add every year on the accumulated amount of the insured the financial return of this amount, minus a ‘life risk’.
A similar decision was issued when Mohammad Safadi was Minister of Finance. The decision was clarified in a later circulation, and then annulled.
Reported by Yassmine Alieh
Date Posted: May 08, 2017