The scope of the VAT exemption applicable to insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents.

Abstract

It is evident that the scope of the VAT exemption of insurance transactions is rather unclear, thus creating many “grey zones” and an atmosphere of legal uncertainty within the EU. This Thesis aims to present and clarify the rules governing the scope of the VAT exemption for “insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents” as stipulated in Art 135(1)(a) of the RVD. It is obvious from the wording of the provision that it is necessary to define the terms “insurance” and “reinsurance” and describe clearly the scope and borderlines within a transaction can be characterized as such. Moreover it is of equal importance to analyze the roles and responsibilities of “insurance brokers” and “insurance agents” and clarify the meaning and substance of “related services”. Consequently, this Thesis aspires to create a road map for the VAT treatment of all the relevant types of insurance contracts by giving answers to the questions: • Which are the subject and nature of VAT exempt “insurance and reinsurance transactions”? • Which are the subject and nature of “related services performed by insurance brokers and insurance agents”