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Taxation of Insurance

Author

Listed:
  • Vidar Christiansen

Abstract

Should we exempt the services of insurance companies from VAT? Addressing this issue, the paper distinguishes between insurance against a general loss of resources and a loss of a specific commodity (property insurance). There is a case for exempting the former kind of insurance, but not the latter. Finally, comparing insurance through a producer warranty with insurance provided separately by an insurance company, it is conceivable that tax exemption of the latter will distort the choice of product quality.

Suggested Citation

  • Vidar Christiansen, 2017. "Taxation of Insurance," CESifo Working Paper Series 6830, CESifo.
    • Handle: RePEc:ces:ceswps:_6830
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp6830.pdf
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    References listed on IDEAS

    as
    1. Grubert, Harry & Mackie, James B. III, 2000. "Must Financial Services Be Taxed Under a Consumption Tax?," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(1), pages 23-40, March.
    2. Michael Keen, 2011. "Rethinking the Taxation of the Financial Sector ," CESifo Economic Studies, CESifo, vol. 57(1), pages 1-24, March.
    3. Jack, William, 2000. "The Treatment of Financial Services Under a Broad-Based Consumption Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 841-852, December.
    4. Jack, William, 2000. "The Treatment of Financial Services under a Broad-Based Consumption Tax," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 841-52, December.
    5. Sijbren Cnossen, 2013. "A proposal to apply the Kiwi-VAT to insurance services in the European Union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(5), pages 867-883, October.
    6. Chia, Ngee-Choon & Whalley, John, 1999. "The Tax Treatment of Financial Intermediation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(4), pages 704-719, November.
    7. Grubert, Harry & Mackie, James B. III, 2000. "Must Financial Services be Taxed Under a Consumption Tax?," National Tax Journal, National Tax Association, vol. 53(n. 1), pages 23-40, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    insurance; warranties; value added tax; VAT exemptions;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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    This paper has been announced in the following NEP Reports:

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