The VAT exemption for services provided by insurance brokers and intermediaries has been the subject of a legal battle before the Court of Justice of the European Union (CJEU).
Bofip (1) has just recorded the consequences of the judgment of March 17, 2016 (2) which confirms a principle of broad exemption with identified exceptions. Exceptions far from satisfying Planète CSCA, which regrets the exclusion of beneficiaries’ management delegates. The union of insurance brokers fears a questioning of their economic model and regrets having been taken aback on a text for which it was initially to be consulted.
Clarification of the services concerned
Bofip’s comment brings, in general opinion, a clarification of the services concerned by the VAT exemption. “For a long time, the French administration had an unclear position in relation to the CJEUsays Christophe Parsupers, vice-president in charge of regulatory affairs at Planète CSCA. It did not officially take a position against and therefore there was no predictability in the situations envisaged by the CJEU. »
Insurance operations likely to be exempt from VAT imply the existence of a contractual relationship between the insurance service provider and the insured. “You have to justify having carried out operations “of the very nature of an insurance intermediary” as qualified by the CJEUsays Christophe Overcoat. From the moment when the role of prospecting and bringing in business can be demonstrated, the remuneration received from the insurer under the contract brought in is intended to be exempt from VAT”.
The service provider must be in contact with the insurer as well as with the insured: it must be part of the product’s distribution chain, even indirectly through subcontracting. Both wholesale and local brokers are therefore eligible.
The status of the operator does not matter, only the act performed counts. Conversely, if the prospecting and business contribution conditions are not met, the exemption does not apply. The service provider in charge of managing the contract on behalf of the insurer is therefore excluded if he has not provided the contract to the insurer. A common situation for personal insurance brokers, particularly in health.
A risk of renegotiation of remuneration
“This is not the position that we had called for: we were asking for the exemption to be maintained because the service provider deploys know-how acquired through its profession as a broker and its own management tools.adds Christophe Overcoat. Some insurers – unable to recover VAT – will seize the subject to try to renegotiate remuneration. It is not normal for the broker in a tripartite relationship to bear the consequences of the evolution of the position of the administration.
The brokers’ union has already planned to meet with France Assureurs in order to prevent the end of the exemption from being entirely passed on to the brokers.
(1) VAT – Exemption of insurance and reinsurance transactions and services relating to these transactions carried out by insurance brokers and intermediaries
(2) Disp. C-40/15, Aspiro SA, ECLI:EU:C:2016:172