5 May 2015

A small Polish general insurer has been in dispute with the Polish tax authorities concerning the application of Polish VAT to claims handling services provided by a third party. The case has now been referred to the Court of Justice of the European Union (CJEU).
The insurer is BRE Ubezpieczenia and the case reference is C-40/15. BRE Ubezpieczenia is a domestic motor, home and travel insurer selling its products through banks. The premiums charged are exempt from VAT, as policyholders are almost entirely Polish resident, but the Polish tax authorities have ruled that the payment of fees to a third party claims handler are taxable.
The tax authority ruling follows the 2005 European Court of Justice judgment in Arthur Andersen & Co, Case C-472/03, which suggested that all back office insurance services such as policy administration should be taxable because the supplier could not be viewed as an insurance broker or agent. However, claims handling was not specifically addressed and the outcome of the current referral is awaited with interest.