Opinion of the Advocate General — ECLI:EU:C:2001:36
Date: 2001-01-18
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the Judgment 
1. Freedom to provide services — Direct insurance other than life assurance — 
Directive 88/357 — 'Establishment' of an insurance company for the purposes of 
Article 2(c) of the Directive — Definition — Subsidiary — Excluded 
(Council Directive 88/357, Arts 2(c) and 3) 
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SUMMARY — CASE C-191/99 
2. Freedom to provide services — Direct insurance other than life assurance — 
Directive 88/357 — Member State where the risk is situated — 'Establishment' of 
the policy-holder for the purposes of Article 2(d) of the Directive —· Definition — 
Scope 
(Council Directive 88/357, Art. 2(d), final indent) 
3. Freedom to provide services — Direct insurance other than life assurance — 
Directive 88/357 — Tax on insurance premiums — Member State levying insurance 
tax on a legal person established in another Member State in respect of premiums 
which that legal person has paid to an insurer, also established in another Member 
State, to cover the business risks of its subsidiary or sub-subsidiary established in the 
Member State making the levy 
(Council Directive 88/357, Arts 2(c) and (d), 3 and 25) 
4. Freedom to provide services — Direct insurance other than life assurance — 
Directive 88/357 — Definitions of 'policy-holder' and 'Member State in which the 
risk is situated' for the purposes of Article 2(d) of the Directive — Interpretation — 
Internal arrangements within a group of companies as regards invoicing and 
payment — No effect 
(Council Directive 88/357, Art. 2(d), final indent) 
1. Article 2(c) of the Second Directive 
88/357 on the coordination of laws, 
regulations and administrative provi­
sions relating to direct insurance other 
than life assurance and laying down 
provisions to facilitate the effective 
exercise of freedom to provide services 
and amending Directive 73/239, which 
defines 'establishment' as the head 
office, agency or branch of 'an under­
taking', relates to the establishment of 
an insurance company. 
Although Article 3 of the Directive 
must be interpreted as extending the 
concept of 'agency or branch' in Arti­
cle 2(c) of the Directive so that it 
applies in the broadest sense, whatever 
the formal term used, it cannot, how­
ever, be inferred that a subsidiary 
constitutes a form of permanent pre­
sence which must be treated in the 
same way as an agency or branch and 
therefore be regarded as an establish­
ment within the meaning of Arti­
cle 2(c) of the Directive. 
(see paras 32, 35, 39) 
2. The term 'establishment', which is used 
in Article 2(c) of the Second Directive 
88/357 on the coordination of laws, 
regulations and administrative provi­
sions relating to direct insurance other 
than life assurance and laying down 
provisions to facilitate the effective 
exercise of freedom to provide services 
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KVAERNER 
and amending Directive 73/239, must 
be interpreted as covering all compa­
nies linked to each other within a 
group where one of those companies 
takes out an insurance policy covering 
other companies in the group. 
(see paras 42, 56) 
3. Articles 2(c) and (d), final indent, and 
3 of the Second Directive 88/357 on the 
coordination of laws, regulations and 
administrative provisions relating to 
direct insurance other than life assur­
ance and laying down provisions to 
facilitate the effective exercise of free­
dom to provide services and amending 
Directive 73/239 permit a Member 
State to levy insurance tax on a legal 
person established in another Member 
State in respect of premiums which that 
legal person has paid to an insurer, also 
established in other Member State, to 
cover the business risks of its subsidiary 
or sub-subsidiary established in the 
Member State making the levy. It 
makes no difference if the legal person 
which paid the premiums and the legal 
person whose business risks are cov­
ered are two companies in the same 
group linked by a relationship other 
than that of parent and subsidiary 
company. 
(see para. 57 and operative part 1) 
4. In interpreting 'policy-holder' or 
'Member State in which the risk is 
situated' for the purposes of Arti­
cle 2(d), final indent, of the Second 
Directive 88/357 on the coordination 
of laws, regulations and administrative 
provisions relating to direct insurance 
other than life assurance and laying 
down provisions to facilitate the effec­
tive exercise of freedom to provide 
services and amending Directive 
73/239, the way in which the premium 
relating to the risk insured is invoiced 
or paid within a group of companies is 
immaterial. Subjective criteria such as 
internal arrangements within a group 
of companies as regards invoicing and 
payment cannot affect the determina­
tion of the Member State where the 
risk is situated nor, therefore, of the 
Member State which is competent to 
tax the insurance transaction, because 
they could lead to tax evasion. 
(see paras 59-60 and operative part 2) 
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