Netherlands: Insurance claims-handling services, VAT | KPMG Global
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Netherlands: Insurance claims-handling services, VAT exemption

Netherlands: Insurance claims-handling services, VAT

The Court of Justice of the European Union (CJEU) issued a judgment concerning application of the value added tax (VAT) exemption for insurance claims-handling services. The CJEU concluded that insurance claim-handling services are subject to VAT if performed by a party that: (1) does not assume the insured risk; and (2) is not acting as an intermediary.


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The CJEU judgment was issued 17 March 2016 in a case on referral from Poland. The case identifying information is: Aspiro SA, (C-40/15). 


Under the EU VAT Directive, activities in respect of insurance and reinsurance and related services—performed by insurance brokers and insurance agents—are exempt from VAT. In prior judgments, the CJEU provided some guidance on the scope of these terms. In general, there is a VAT-exempt insurance activity if: (1) the insurer, (2) in exchange for the prior payment of a premium, (3) undertakes to provide the insured, in the event of materialization of the risk covered, with the payment agreed when the contract was concluded.

Insurance-related services are present if the service provider has a relationship with both the insurer and the insured, and performs activities essential to the function of an insurance agent, such as finding prospective clients and introducing those new clients to the insurer (i.e., insurance mediation).

Implications for Dutch insurance sector

The recent CJEU judgment clarifies the position of the CJEU—that separately outsourced claims-handling services do not fall under the insurance exemption with respect to the VAT Directive. This generally is the current Dutch treatment of these services and reflects a 2013 judgment by the Court of Appeals in the Hague concerning run-off and claims-management services. 

In certain instances, the Dutch tax authorities have taken a position that claims-handling is VAT exempt. Will the recent CJEU judgment cause the tax authorities to reconsider this position? Also in certain instances, (reverse charged) VAT may be payable in the future. Nevertheless, there are situations when it is conceivable that claims-handling is not VAT-able—for example, if this service is accompanied by the transfer of the risks insured in respect of an insurance portfolio or the performance of intermediary services.

Implications within EU

Within the EU, there is no general rule as far as application of the insurance exemption to claim-handling services. For example, in Ireland, the United Kingdom, and Belgium, the VAT exemption is broadly applied. 


Read a March 2016 report prepared by the KPMG member firm in the Netherlands: CJEU: separate claim handling by third parties is subject to VAT

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