In mid-June, the insurance community warned that if tax amendments for life insurance products were adopted in their current form, this could stop sales of investment life insurance and endowment policies (ILI and ULI) or even lead to the complete loss of this market segment.
An additional return (survival payment minus the contribution) received by the client at the time of payment in ILI and endowment, is not subject to personal income tax if it does not exceed the average annual key rate of the Central Bank for each year of the contract. But the amendments to the Tax Code cancel this stipulation the tax will have to be paid on any amount exceeding the amount of premiums. Moreover, at the new rate: 13% - for return less than 2.4 million rubles (12.7 million tenge) per year and 15% - over 2.4 million rubles per year. The State Duma adopted the tax bill in the first reading on June 20.
Against the backdrop of adoption of amendments, some companies have also frozen the development of a new product, shared life insurance (SLI), which is scheduled to appear on January 1, 2025. Four out of ten top managers of life insurers told Vedomosti about this. The marketing proposal of the future product, as well as testing its possible demand among potential clients have also been put on hold, two sources in major players clarify. The market is analyzing the product's prospects in light of the new tax legislation, one of them adds: if the law is implemented in its current form, the feasibility of launching UL tends to zero.
Tax incentives for UL will be developed by the Bank of Russia and the Ministry of Finance separately, since this product will only be available from January 1, 2025, says the Central Bank representative. If any benefits for UL are planned to be introduced, it is extremely difficult to model them now isolated from the future taxation of life insurance in general, notes Yakovlev from the All-Russian Union of Insurers.
Source: http://www.finmarket.ru/main/article/6200318
Photo is from open sources.
