In the case at hand, an insurance agent established in the Netherlands renders services to a number of insurance companies. The majority of the services provided by the insurance agent are regarded as “run-off services” and claim management services.
The question of whether the services at hand were subject to VAT was referred to the Dutch court of appeal. The Dutch court of appeal based its ruling on the JCM Beheer BV court ruling and the Arthur Andersen court ruling of the European Court of Justice.
In the JCM Beheer case, the phrase "(with insurance and reinsurance) related services performed by insurance brokers and insurance agents" refers only to services provided by professionals with both the insurer and the insured party . The Court of Justice emphasised the relations between the insurance agent and the parties to the insurance contract. The court furthermore concluded that only persons directly (in the capacity of agent) or indirectly (in the capacity of subagent) contribute to the conclusion of the insurance contract, to share in the exemption.
In the opinion of the court, the run-off and contract management services did not meet these conditions. Although the insurance agent maintains (direct) links with the insurer, it has not directly or indirectly contributed to closing the relevant insurance contracts. Under these circumstances, the services do not qualify for the exemption.
Instead, the Dutch court ruled that the services at hand are more comparable with the services rendered in the Arthur Andersen case. Arthur Anderson, which in fact, according to the Dutch court, carried out services that are comparable to claims management services, was not eligible for the exemption because its services could not be regarded as distinctive and essential as that of an insurance agent because they did not introduce any new customers.
The same goes for the run-off services and the claim management services at hand. It follows that the latter services, although they undoubtedly contribute substantially to the work of an insurer, are not specific to and essential for providing an insurance.
It shows from the aforementioned that the VAT exemption for insurance activities has the specific purpose to exempt the operations existing in the conclusion of insurance contracts. These are the services which are par excellence carried out by insurers. Precisely because of this intention, and the fact that the exemption with regard to insurance and reinsurance related services shall not extend beyond services rendered by intermediaries or such professionals, the services rendered at hand are not to be regarded as the (attempt to) conclude an insurance.
As a result, the Dutch court ruled that the services at hand do not qualify as insurance services and are thus not exempt from VAT