VAT liability regarding “back office” services supplied to the Insurance Industry

This e-brief is further to Revenue e-Brief 08/2005, which concerned the impact of the European Court of Justice ruling in Case C-472/03 (involving Arthur Andersen & Co, Accountants and the Dutch State Secretary for Finance). The Court held in that case that certain “back office” services provided to insurance companies do not come within the terms of the VAT exemption in the Sixth VAT Directive which applies to services provided by insurance agents.

Revenue officials have studied the implications of the judgement in this case for Irish law and, as part of that process and in keeping with the commitment given in Revenue e-Brief 08/2005, consulted widely with the insurance services industry and other interested parties.

Pending a now proposed EU Commission review of the financial services provisions in the Sixth VAT Directive, Revenue wishes to clarify that current VAT practice, within the provisions of existing Irish VAT legislation, continues to apply to insurance related services provided by insurance brokers and insurance agents.

Revenue appreciates the co-operation received from the insurance industry and other parties in the consultations following the judgement. These contacts were valuable on both sides and, hopefully, will be maintained as the EU Commission review progresses.

If any further clarification on this e-Brief is required, please contact Donal Barry or Mary Morgan, VAT Interpretation Branch (tel. (01) 7024223 or (01) 6748648) or email dbarry@revenue.ie.