Commentary: Rule 21 Insurance premium tax
Some countries levy a tax on insurance premiums. This is often connected with an obligation for the insurer to declare premiums to the relevant tax authority. The clause makes it clear that it is the Member who is liable to pay any such tax. It may however not always be possible for the Club to avoid tax liability in the first instance, depending on the legislation in the particular country. Sometimes there is a joint liability for the insurer and the insured to pay premium tax and the tax authorities may find it easier to pursue an insurance company for a debt rather than a shipping company. If so, the Club may be forced to pay the tax on behalf of the Member in the first instance and in such cases this Rule will enable the Club to recover the amount so paid from the Member. It is the Member’s duty always to pay insurance premium tax in the first instance. If the Club for some reason cannot avoid the tax liability the Member is obliged to indemnify the Club.