15/06/2017

VAT & Insurance: Administrative guidance narrowing the VAT exemption for insurance claim settlement services as from 2018

On 12 June 2017, the Belgian VAT authorities published circular letter n° 2017/C/36 which provides guidance on the application of the VAT exemption for insurance and reinsurance transactions as described in article 44, §3, 4° of the Belgian VAT Code.

As of 1 January 2018, the VAT exemption for insurance transactions will no longer be applicable to claims settlement services provided by a third party in the name and on behalf of an insurance company if that third party did not intervene in the conclusion or modification of the insurance contract. The change is the result of the ECJ Case Aspiro of 17 March 2016 (C-40/15).

Claims settlement services may include one or more of the following services: receiving insurance claims, settling substantive claims, making technical assessments and any additional damage assessments in case of insurance claims, considering appeals and complaints in respect of claim settlements, sending and receiving correspondence relating to claims settlement, etc.

The circular letter is applicable to insurance brokers and agents, but not to underwriting agents (‘onderschrijvingsagenten / agents souscripteurs’). For the latter a separate circular letter will be published.

Please do not hesitate to reach out to Loyens & Loeff Indirect Tax should you have any further queries about this topic.

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