This request for a preliminary ruling seeks an interpretation of Article 13(B)(a) and (c) of Directive 77/388/EEC and Articles 135(1)(a) and 136(a) of Directive 2006/112/EC, which replaced the former provisions, with a view to determining whether the concept of ‘insurance and reinsurance transactions’, as the principal activity of an insurance company, also includes related or supplementary activities, in particular the purchase and sale of parts from written-off vehicles, and whether, to that extent, the latter activity is also exempt from value added tax (‘VAT’). The referring court also seeks a determination as to whether that exempt may be inferred from the fact that the insurance company is an entity exempt from that tax where the aforementioned goods have not given rise to a right to deduction of VAT. Lastly, it asks whether it is contrary to the principle of fiscal neutrality for the sale of parts from written-off vehicles not to be exempt from VAT.
Context:
Article in the EU VAT Directive
Article 135(1)(a) of Directive 2006/112/EC
Article 135
1. Member States shall exempt the following transactions:
(a) insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents;
Facts
- The appellant is an insurance company which, in the course of its business, purchases vehicle parts from accidents in which its policyholders have been involved and subsequently sells them.
- Further to an inspection carried out by officials from the Divisão de Inspeção a Seguradoras e Sociedades Financeiras (Division for the Inspection of Insurers and Financial Institutions), part of the Direção de Serviços de Inspeção Tributária (Tax Inspection Services Directorate) within the then Direção Geral dos Impostos (Directorate-General for Taxation), corrections were made to the value added tax
(VAT) due for the 2007 financial year in the amount of EUR 17 213.70 plus interest. - Those corrections were made on the basis of an assessment carried out by the Tax Administration in relation to the sale of parts from written-off vehicles, which is reflected in the inspection report as follows:
‘The taxable person did not account for VAT on the transfer of goods (parts from written-off vehicles). The sale of parts from written-off vehicles is a transaction subject to VAT in accordance with Article 3 of the [VAT Code], inasmuch as it is considered to be a transfer of movable property for consideration, at a rate of 21%, pursuant to Article 18(c) of that Code.’ - Consequently, the Tax Administration made the assessments to VAT set out in paragraph 1, plus the corresponding interest, in the total amount of EUR 18 715.86.
Questions
- A. Must Article 13(B)(a) of the Sixth VAT Directive, and, therefore, the current Article 135(1)(a) of the VAT Directive, be interpreted as meaning that the concept of ‘insurance and reinsurance transactions’ includes, for the purposes of exemption from VAT, related or supplementary activities such as the purchase and sale of parts from written-off vehicles?
- B. Must Article 13(B)(c) of the Sixth VAT Directive, and, therefore, the later Article 136(a) of the VAT Directive, be interpreted as meaning that parts from written-off vehicles are regarded as being purchased and sold solely for an exempt entity, where those goods have not given rise to the right to deduction of VAT?
- C. Is it contrary to the principle of VAT neutrality for the sale of parts from written-off vehicles by insurance companies not to be exempt from VAT where there was no right to deduction of VAT?
AG Opinion
Decision
Summary
Source
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