The Advocate General of the European Court of Justice (ECJ) issued an opinion on 23 December 2015 in the case of Minister Finansow v BRE Ubezpieczenia Sp z.o.o. This case concerned a Polish insurance company (Aspiro) that provided insurance services to another insurance enterprise (Ubezpieczenia), acting on its behalf and with no legal relation to the persons making insurance claims. The services involved liaison with the insured persons, examining insurance claims and settling the claims. Aspiro also handled recourse claims and appeals against settlements, in addition to other administrative activities.

In the view of the Polish tax authorities the activities of examining claims and handling settlements were exempt from VAT but other activities did not qualify for the VAT exemption for insurance. The case was taken to teh Polish Supreme Administrative Court which referred the case to the ECJ for a preliminary ruling.

Issue referred to the ECJ

The Polish Supreme Administrative Court referred the following question to the ECJ:

Should Article 135(1)(a) of the EU VAT DIRECTIVE (2006/112) be interpreted to mean that services supplied on behalf of an insurance undertaking by a third party, in the name and on behalf of the insurer, that has no legal relationship with the insured person, are covered by the VAT exemption for insurance?

Provisions of the EU VAT Directive

Article 135 (1) (a) of the EU VAT Directive 2006 grants an exemption from VAT for insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents.

Advocate General’s Opinion

The Advocate General considered that the services did not qualify as insurance or reinsurance transactions as Aspiro did not have any legal relationship with the insured persons and was not assuming the obligation to provided them with insurance cover for risks. The issue was therefore whether the services came within the VAT exemption as related services provided by a broker or insurance agent.

The Advocate General considered that the services from Aspiro were not activities of an insurance broker or insurance agent as these were not the main activities of Aspiro. There Advocate General’s opinion was that insurance claims services supplied for an insurance undertaking by a third party on behalf of the insurance undertaking, where there is no legal relationship between that third party and the persons insured, and where the services do not involve customer acquisition by facilitating contact between the insured person and the insurance undertaking to conclude an insurance contract, do not come within the VAT exemption under Article 135 of the EU VAT Directive 2006.

The ECJ may take into account the Advocate General’s opinion when it issues a decision but is not obliged to follow that opinion.