Keywords
Summary

Keywords

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for by the Sixth Directive – Exemption for services related to insurance transactions by insurance brokers and insurance agents – Meaning – ‘Back office’ activities consisting in assisting an insurance company in the performance of its activities – Excluded

(Council Directive 77/388, Art. 13B( a))

Summary

Article 13B(a) of Sixth Directive 77/388, relating to the exemption from value added tax of insurance and reinsurance transactions, including certain related services, must be interpreted as meaning that ‘back office’ activities, consisting in rendering services, for payment, to an insurance company, do not constitute the performance of services relating to insurance transactions carried out by an insurance broker or an insurance agent within the meaning of that provision.

Since, first, those services have specific aspects, such as the setting and payment of commission for insurance agents, the maintenance of contact with them, the handling of aspects relating to reinsurance and the supply of information to insurance agents and to the tax authorities, and, secondly, essential aspects of the work of an insurance agent, such as the finding of prospects and their introduction to the insurer are lacking, the activities in question must be regarded as a form of cooperation consisting in assisting an insurance company in the performance of activities which would normally be carried out by it, but without having a contractual relationship with the insured parties, and constitute a division of the activities of the insurance company and not the performance of services carried out by an insurance agent.

(see paras 35-36, 38-39, operative part)