Tax evasion probe in Belgium will examine Irish Life product sales
THE sale of Irish Life products in Belgium is likely to be examined as part of a major probe into potential tax evasion by Belgian brokers, the Irish Independent has learned.
The Belgian authorities have confirmed they're examining the way commission was paid on Belgian sales of insurance products from four Irish companies.
The probe centres on the practice of paying commission to Luxembourg in respect of insurance policies sold through Belgian brokers, a practice authorities believe has led to €38m of tax evasion by brokers.
Irish Life yesterday confirmed its international division paid commission to Belgian brokers through a "master broker" in Luxembourg until December 2008.
A spokesman stressed that the relationship was "entirely normal" since the master broker was based in Luxembourg and was regulated there.
"Irish Life International has not been notified in any way that is amongst the firms whose transactions are being examined," he said. "All our payments were entirely appropriate and legitimate."
Stefaan Huysentruyt, a spokesman for Belgium's state secretary for fraud investigations, confirmed that the payment of Belgian brokers through a Luxembourg intermediary was the "kind of thing" under investigation.
He added that the insurance companies whose sales are being probed have not yet been contacted.
Irish Life "terminated" its relationship with that master broker in December 2008 and "reported concerns" to the Luxembourg regulator at that point.
He declined to reveal whether those "concerns" were linked to tax issues. Irish Life continues to sell into the Belgian market and now deals directly with Belgian brokers.
The Belgian authorities have refused to name the Irish insurance companies whose products are involved since there is no evidence of any wrong doings on their part.
The group of four insurers is understood to be largely made up of IFSC-based operations, as well as at least one "big" indigenous insurer. All four are still selling in Belgium.
Between them, the quartet are believed to have paid out commissions of about €100m through Luxembourg, suggesting product sales of more than €2bn in the Belgian market.
The latest figures from the Financial Regulator show there are 43 life insurers based in Ireland and selling their products overseas. The probe centres on the activities of 200 of Belgium's 4,000 brokers and is expected to last for several months.