In most cases, duty is imposed on the 'insurer' because they are liable to pay the duty. In practice, an insurer would usually pass this cost onto their clients as part of the cost of providing the insurance.
This means that even if you or your organisation is usually exempt from Australian taxes (e.g. charities, public benevolent institutions and similar) you will still be charged the cost of the duty by the insurer.
An insurer determines if the type of insurance provided qualifies for one of the exemptions provided by section 190 of the Duties Act 2001.
Common exemptions include:
- insurance covering property of the Crown;
- health insurance;
- workers compensation insurance;
- insurance for a hull of a floating vessel used for commercial purposes;
- insurance for the freight of goods;
- reinsurance contracts;
- insurance premiums paid that relate to a separate policy in a distinct sum for public liability insurance (effective 1 July 2002); or
- insurance taken out by a medical establishment as defined in Section 3 of the Act.
Refer to Part 5
of the Act for a full list of exemptions.
Public liability insurance exemption
Effective from 1 July 2002, an exemption applies to:
- insurance effected by a separate policy in a distinct sum against a claim for public liability; and
- insurance in a distinct sum against a claim for public liability included in a package of insurance other than in a domestic policy covering home or contents or both home and contents.