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GST and co-insurance arrangements

Three possible ways to treat co-insurance for GST purposes.

Last updated 28 November 2017

Co-insurance is the sharing of risk among insurers. The goods and services tax (GST) treatment of co-insurance arrangements depends on the nature of the arrangement between the co-insurers in each case.

These arrangements do not cover all the possibilities of co-insurance arrangements. You should seek advice based on your particular co-insurance arrangement. In the case of Subdivision 153-B agreements and GST joint venture agreements it is up to the co-insurers to choose whether they want these arrangements to apply.

There are various conditions outlined in the relevant parts of the GST Act that have to be met before entities can choose to apply those arrangements. These requirements are not discussed below.

This information is for insurers. It describes the GST treatment of co-insurance under three possible arrangements:

Agency agreement

Where an agency relationship exists Subdivision 153A of the A New Tax System (Goods and Services Tax) Act 1999 applies.

Subdivision 153-B arrangements

Where the co-insurance group has entered into a Subdivision 153-B agreement, the provisions of that Subdivision apply.

Joint venture agreement

Where the co-insurance group has formed a GST joint venture, Division 51 would apply.

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