HAVING REGARD to Article 5 (b) of the Convention on the Organisation for Economic Co-operation and Development of 14th December 1960;

HAVING REGARD to the Report of the Fiscal Committee of 25th March 1961 on Tax Regulations relating to Insurance against Nuclear Risks [Doc. No. C(61)52];

HAVING REGARD to the Report of the Payments Committee of 22nd December 1961 on Nuclear Risk Insurance and, in particular, paragraphs 14 and 15 thereof [Doc. No. OECD/PC(61)2];

I.            RECOMMENDS:

(a)        Members to give tax treatment to technical reserves relating to nuclear risk insurance which is at least as favourable as the most advantageous tax treatment of technical reserves relating to general loss or injury insurance and, where appropriate, to introduce as rapidly as possible such changes in their laws as may be necessary for this purpose;

(b)        Members which levy taxes on insurance premiums to ensure that any taxes charged on nuclear risk insurance premiums:

           will not be levied on a basis less favourable than the most advantageous tax treatment of premiums relating to general loss or injury; and

           will amount to 5 per cent of the premium at the most.

II.           DECIDES:

(a)        Members shall report to the Organisation before 1st January 1963 on any changes they have made in their tax regulations relating to insurance against nuclear risks since 1st July 1959 or any changes relevant to the present Recommendation, which they envisage making;

(b)        The Fiscal Committee shall be responsible for considering the information supplied to the Organisation under paragraph (a) above and in the light of this information, for reporting to the Council what possibilities exist for Members to adjust their tax system, and especially, the regulations governing reserves and premiums, with a view to easing the financial problems raised by the introduction and development of nuclear risks insurance;

(c)        The Insurance Committee and the Payments Committee are invited to comment on the Report to be prepared by the Fiscal Committee under paragraph (b) above.

In adopting this Recommendation, the Council TOOK NOTE that the United States abstained from this Recommendation and that Canada would not be able to apply it in its entirety.