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E-tax flash - The ECJ decides on VAT treatment of claims handling services

VAT treatment of claims handling services

ECJ: the settlement of claims is taxable if provided by a third party.


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The Court of Justice of the European Union (ECJ) recently released a judgement regarding the VAT treatment of claims handling services that is likely to have a substantial impact in Belgium (ECJ, 17 March 2016, Aspiro SA, C-40/15).

ECJ: the settlement of claims is taxable if provided by a third party

The ECJ has been requested to determine the extent to which the activity of Aspiro SA (Aspiro) is exempt from VAT. The latter supplies services consisting of comprehensive settlement of insurance claims on behalf of an insurer. It notably acts in the name and on behalf of the insurer vis-à-vis the insured person and receives insurance claims and conducts investigations.

The Court is of the opinion that Aspiro does not provide insurance services, nor are its activities similar to insurance intermediation since:

  • Aspiro neither provides the insured party with insurance cover by undertaking itself to cover risks nor is it in a contractual relationship with the insured party; 
  • Aspiro does not carry out core activities of an insurance agent or insurance broker, i.e. bringing the parties together with a view to the conclusion of insurance contracts.

Therefore, according to the Court, the settlement of insurance claims by a third party acting in the name and on behalf of an insurance company does not fall within the scope of the exemption for insurance services.

What is the impact for the insurance sector?

The ECJ released an unambiguous decision on the VAT treatment applicable to claims handling services rendered by a third party services provider. This decision circumscribes the scope of the VAT exemption on insurance services and may have significant consequences for insurers outsourcing claims handling services as well as for their third party suppliers of such services.

In Belgium, contrary to many other Member States, administrative guidelines state that claims handling services rendered by a third party service provider are in principle VAT exempt (taxpayers may however choose to tax these services). Whether the Belgian VAT authorities will react to this judgement and publish new guidelines remains to be seen.

Insurers and claims handling service providers should now anticipate the impact of this case-law and take the necessary steps to avoid and/or mitigate possible difficulties that may arise due to the taxable nature of these services, particularly in the post-Skandia landscape.

Nevertheless, until potential administrative changes are made, Belgian taxpayers can still rely on existing Belgian administrative guidelines providing for an exemption of claims handling services provided by a third party.

Should you be concerned about the consequences of this judgement, please contact our FS VAT team: Jeroen Gobbin (+32 2 708 37 67), Sebastian Kirsch (+32 2 708 37 91), Ellen Geeraerts (+32 2 708 36 35), Benoît Pernet (+32 2 708 39 28) or Philippe Gamito (+32 2 708 48 00).


KPMG Tax Advisers

Bourgetlaan - Av. du Bourget 40 B-1130 Brussels

Tel.: +32 2 708 38 24

© 2020 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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