Withholding Tax in IPMI Explained

Understanding Withholding Tax for International Private Medical Insurance

A withholding tax, also known as a retention tax, is a type of tax that is deducted at the source of an income payment, rather than being paid directly by the recipient of the income. The purpose of a withholding tax is to ensure that a portion of the recipient’s income is set aside for payment of taxes owed, to minimize the risk of tax evasion. In the context of International Private Medical Insurance (IPMI), the term “withholding tax” refers to the tax that is withheld from the premium payments made by policyholders for their IPMI coverage. The amount withheld serves as a partial payment of the policyholder’s tax obligation for the premium income received by the insurance company.

Some countries you may also be required to apply withholding tax payable by you. If that is the case, it is usually your own responsibility to calculate and pay this amount to the relevant authorities in addition to payment of your full premium .