The Court of Justice of the European Union (CJEU) confirmed in its recent judgment (Aspiro, C-40/15) that insurance claims handling services should be taxable for VAT purposes. This decision is in line with the current practice and/or rules in a number of Member States (e.g. Germany, France), however, it is likely to place a greater focus on the VAT treatment of insurance related services in countries which to date, have widely applied the VAT exemption to insurance related services (e.g. the UK).


Aspiro provided claim handling services (i.e. receiving and processing claims and damages covered by insurance, contacting the insured person to conduct any inspection to determine the causes and circumstances of an accident, preparing expert damage reports, dealing with appeals and complaints regarding claim handling and administrative and technical tasks related to these activities).

It had only a legal relationship with the insurer who engaged Aspiro to provide the above services in the name and on behalf of the insurer, i.e. Aspiro did not have any contractual relationship with the insured, however it dealt directly with them.

Aspiro considered its activities to be VAT exempt insurance services on the grounds that they are a key element of the business of the insurance company.


The court considered two routes to a VAT exemption, i.e. services being a part of an insurance service and insurance related services typically performed by insurance agents and/or brokers. Having done so, it concluded that the services provided by Aspiro did not represent either of the services leading to a VAT exemption. This was because Aspiro did not have a contractual relationship with the insured (key condition supporting the characterization as an insurance service) nor undertook the role of finding prospective clients to introduce them to the insured with the view of concluding an insurance contract (key condition supporting the characterization as an insurance related service).

Conclusion and recommendation for actions

As noted above, we anticipate that the above decision will give rise to a review of the scope of the national VAT exemption for insurance related services especially in the countries with a broader scope of the application of the above VAT exemption. Thus, insurers and their suppliers should carefully review their service arrangements and assess the impact of the potential changes (i.e. limited scope of the VAT exemptions) in terms of potential higher VAT costs for the insurers as well as opportunities to maximize input VAT recovery for the suppliers.

Finally, there may be scope to consider the claims handling services to be VAT exempt if they are provided as a part of single supply together with insurance intermediation (Aspiro did not deal with this matter explicitly).