The Premium in the Insurance Sector. Basic Aspects for Tax Calculation

Abstract

This paper analyzes the technical and legal nature of insurance premiums in the Venezuelan insurance sector and their complex tax treatment. The premium is an essential consideration for assuming risk, noting that, although recorded as income in accounting, it initially represents a liability earmarked for the establishment of mandatory technical reserves to cover future claims. The text highlights the high tax burden faced by the sector, which, if improperly channeled, could discourage the use of insurance. The tendency to tax the gross premium before it is actually earned could distort the concept of income, generate a regressive burden that is passed on to the insured, and increase the cost of accessing financial protection. The calculation of the taxable premium must consider technical deductions such as claims paid and reserves to guarantee the solvency of companies and the stability of the system.