What’s the small business insurance duty exemption?
So, what’s insurance duty?
Insurance duty is usually applied on an insurance premium. The cost of duty is built into your premium and different rates apply depending on the type of insurance you hold. These differing rates are set by your state government and are usually calculated as a percentage of your insurance premium.
The NSW Government has passed a small business insurance duty exemption which applies to all eligible insurance taken out on or after 1 January 2018. If you own or run a business in NSW you may be exempt from paying insurance duty on different types of insurance policies you hold. Find out if you’re entitled to this exemption and how to make the most of this NSW Government incentive.
Small business exemption
To qualify for the small business insurance duty exemption you’ll need to be an eligible small business and you’ll need to provide a declaration to your insurer.
Generally, small businesses are classed as such when;
- Your business turned over less than $2 million last year or,
- Your business aggregated turnover for the current year is likely to be less than $2 million.
Exempt insurance types
There are 4 different types of insurance that apply to the NSW insurance exemption;
Commercial vehicle insurance
For vehicles that are used primarily for business purposes.
Commercial aviation insurance
For an aircraft used primarily for business purposes.
Occupational indemnity insurance
For insurance covering liability arising out of the provision by a person or professional services or other services (other than medical indemnity cover within the meaning of the Medical Indemnity Act 2002 of the Commonwealth).
Product and liability insurance
For insurance covering liability for personal injury or property damage occurring in connection with a business or arising out of the products or services of a business.