Taxes and duties on insurance premiums have always been a contentious issue. Most insurance products are subject to GST, most states still charge a stamp duty on insurance products and NSW and Tasmania still fund their fire and emergency services via a levy on property insurance policies.
The NSW government recently introduced a stamp duty exemption for small business on certain types of insurance products. This means that if your business and the insurance product you are purchasing qualifies, you are not required to pay the NSW Stamp Duty that would otherwise be added to your insurance premium.
The exemption applies to the following insurance products that have a policy inception date on or after 1st January 2018:
Small business is defined by the Income Tax Assessment Act 1997. Essentially this is small business entities that are an individual, partnership, company or trust that have an aggregated turnover of less than $2 million.
So, if your business falls within the small business definition and you are purchasing one of the insurance products listed above then you can apply for a stamp duty exemption.
In order to apply for the exemption you must complete and sign a declaration form to confirm that you are a small business. This declaration form is available from your account manager. Once your insurer is in receipt of your completed declaration they will reissue your quotation terms with the NSW stamp duty charge removed.
Unfortunately, the declaration is only valid for 12 months so going forward you will be required to complete a new declaration each year to confirm your small business status.
More information on the NSW small business stamp duty exemption is available here http://www.revenue.nsw.gov.au/taxes/insurance/exemptions/sbe
If you have any questions about the small business stamp duty exemption please contact your account manager.