Offshore insurance companies are lobbying for an exemption from a proposed extension of the European Union Savings Directive (EUSD).
The European Commission plans to extend the directive – brought in 2005 – to fill loopholes in the form of insurance policies, structured products, trusts and foundations.
The EUSD only applies to interest from bank accounts. The EC believes omissions in the original directive have allowed tax evasion to continue.
Brendan Harper, technical services manager for Friends Provident International and chairman of the AILO taxation committee (pictured), said: “At an industry level both domestically and internationally we are not in favour of an extension.”
He added that the international life industry operates in an extensive reporting environment for most of its business.
It remains to be seen how exactly the proposals – which also affect unit trusts and Oeics – could be applied to insurers, but life offices say the administrative burden could be significant. Any added cost is likely to be borne in a large part by investors.
