Aspiro SA provides claims handling services under a contract with an insurance company. The question to be resolved was whether the services it provided under that contract could properly be regarded as insurance transactions or insurance related services performed by insurance brokers and insurance agents. If the answer was that they were to be so regarded then under the provisions of the VAT Directive, the services should benefit from VAT exemption. On the hand, if the services in question did not meet the definition, the services would be liable to VAT. The CJEU considers that the claims handling services did not qualify for VAT exemption.

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Summary
Aspiro SA provides claims handling
services under a contract with an
insurance company. The question to
be resolved was whether the
services it provided under that
contract could properly be regarded
as insurance transactions or
insurance related services performed
by insurance brokers and insurance
agents.
If the answer was that they were to
be so regarded then under the
provisions of the VAT Directive,
the services should benefit from
VAT exemption. On the hand, if
the services in question did not
meet the definition, the services
would be liable to VAT.
The CJEU considers that the claims
handling services did not qualify for
VAT exemption.
17 March 2016
Court of Justice of the European Union
This was a referral to the CJEU by the Polish courts. In essence, the issue to be
resolved was whether the claims handling services provided by Aspiro to an insurance
company qualified for exemption from VAT. The VAT Directive provides an
exemption for 'insurance transactions' including 'related services' performed by
'insurance brokers' or 'insurance agents'.
The CJEU considered that the claims handling services could not be regarded as
insurance transactions. Aspiro was not involved in the provision of insurance cover to
the claimant but merely handled any claims arising out of the insurance contract
concluded between the claimant and the insurer. Consequently, even though the claims
settlement service is an essential part of an insurance transaction in that it includes the
determination of liability and the amount of damage, and the decision to pay or refuse
to pay compensation to the insured person, the service does not constitute an insurance
transaction.
The Court also concluded that Aspiro was neither an insurance broker nor an insurance
agent. Those terms envisage that, for VAT purposes, the services of such intermediaries
consist in the finding of prospective clients and their introduction to the insurer with a
view to the conclusion of insurance contracts. In Aspiro's case, they simply provided
claims handling services and were not involved in any way with the introduction of the
customer to the insurer. Whilst the claims handling services may be 'related services',
for the exemption to apply, they had to be provided by an insurance broker or an
insurance agent. That was not the case here and Aspiro's claims handling services were,
therefore, taxable.
Comment – this judgment agrees with the earlier Advocate General's opinion
and will come as a blow to claims handlers and insurers. Businesses involved
solely with claims handling will need to urgently review their contracts to see
whether they are entitled to pass on any VAT cost to the insurer.
Case C-50/15 - Aspiro SA
Case Alert
Contact
Stuart Brodie Scotland stuart.brodie@uk.gt.com (0)14 1223 0683
Andrew Jackson London andrew.t.jackson@uk.gt.com (0)20 772 82124
Olga Bondar London Olga.bondar@uk.gt.com (0)20 772 82660