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Commentary to ECJ C-695/19 (Rádio Popular) – Service of warranty extension as an insurance operation and costs impact on the pro-rata deduction

The judgment (with case number C-695/19) of the European Court of Justice (ECJ) tries to clarify the qualification of the operations carried out by the taxpayer (the entity Rádio Popular), which offers to its clients a service to extend the guarantee of the items purchased through an insurance contract concluded with an insurance company, as well as the impact that such operations may have on the calculation of the deduction pro-rata.

This refers to an entity whose main activity is the sale of household appliances and other computer items, which offers its customers the possibility of extending the guarantee of the items purchased, through an insurance contract and with an insurance company, which guarantees the buyer, in the event of a claim, the repair of the item or its replacement, during a period additional to that covered by the manufacturer’s warranty. This contract is concluded between the buyer and the insurance company, but it is Rádio Popular who charges the customer as consideration for the extension of the guarantee.

Source Diligens

ECJ Case: C-695/19

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