Tax reform 2005
Insurance sector calls for full elimination of tax discriminations
On 11 February the tax reform bill 2005 was sent out comments to involved circles. The insurance sector welcomes the decrease in corporate income tax from 34% to 25% and the adjustment of group taxation to contemporary requirements, which are important measures and impulses for Austria’s economy.
The political will, namely to reduce taxation of the actuarial reserves – which are the liabilities vis-à-vis policy holders – has, however, not at all been adequately put into practice. The proposed reduction of the actuarial reserves from 15% to 8% is too little and also comes too late (year of assessment 2005). For reasons of competitiveness with other EU countries we had called for a complete elimination of this tax, in order to secure Austria’s position as an industrial location. In addition, other drawbacks of an industrial location continue to be in place, such as the tax treatment afforded to fluctuation reserves, the minimum taxation of life insurance policies, and the different treatment of a range of pension products.
The insurance industry will therefore continue to make efforts to gain acceptance of its position in order to prevent that more international insurance group leave Austria and that Austrian insurers give serious thought to transferring their headquarters to another country. This would mean that jobs with high qualifications are at risk and that Austria’s capital market would be hard hit.
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