- The District Court of Noord-Nederland ruled that claims settlement services provided by foreign representatives to the insurance company X and insurance services provided by X to policyholders are separate and cannot be considered a single indivisible supply for VAT purposes.
- Coöperatie X U.A., part of an insurance group, offers various insurance products and utilizes foreign claims representatives, which are fully owned subsidiaries, for claims processing abroad.
- X classified the claims settlement services as taxable, believing the reverse charge VAT mechanism applied, but argued that this VAT was incorrectly charged due to the services being part of a single exempt insurance supply.
- The Hoge Raad clarified that services provided under different legal relationships cannot be treated as a single supply, leading the District Court to conclude that claims settlement services cannot benefit from the VAT exemption applicable to insurance services.
- The court’s decision aligns with European Court of Justice case law, confirming that X’s claims regarding VAT exemptions were rejected, establishing a clear distinction between the two types of services for VAT treatment.
Source Taxlive
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