Försäkringsaktiebolaget Skandia (publ).
Date: 2001-03-08
23 It is settled law that the exemptions provided for by Article 13 of the Sixth Directive constitute independent concepts of Community law whose purpose is to avoid divergences in the application of the VAT system as between one Member State and another (see Case 348/87 Stichting Uitvoering Financiële Acties [1989] ECR 1737, paragraph 11, and Case C-349/96 CPP [1999] ECR I-973, paragraph 15) and must be placed in the general context of the common system of VAT (see, to that effect, Case 235/85 Commission v Netherlands [1987] ECR 1471, paragraph 18).
25 It submits that the interpretation of the term insurance should not differ according to whether it appears in the Community directives on insurance or in the Sixth Directive (see, to that effect, CPP, cited above, paragraph 18).
30 First, it is true that, in paragraph 18 of its judgment in CPP, cited above, the Court held that there is no reason for the interpretation of the term insurance to differ according to whether it appears in the directives on insurance or in the Sixth Directive.
32 Indeed, according to established case-law, the terms used to specify the exemptions provided for by Article 13 of the Sixth Directive are to be interpreted strictly, since they constitute exceptions to the general principle that turnover tax is to be levied on all services supplied for consideration by a taxable person (see to that effect Stichting Uitvoering Financiële Acties, cited above, paragraph 13; Case C-453/93 Bulthuis-Griffioen [1995] ECR I-2341, paragraph 19; Case C-346/95 Blasi [1998] ECR I-481, paragraph 18; and Case C-149/97 Institute of the Motor Industry [1998] ECR I-7053, paragraph 17).
36 It is important to note in that connection that, in contrast with the case which gave rise to the judgment in SDC, cited above, in which the Court had to interpret Article 13B(d) of the Sixth Directive, points 3 and 5 of which refer in a general way to transactions concerning or involving certain banking operations, rather than solely to banking operations proper, the exemption provided for in Article 13B(a) covers insurance transactions in the strict sense.
37 When called upon in CPP, cited above, to interpret the term insurance transactions in Article 13B(a) of the Sixth Directive, the Court held in paragraph 17 of the judgment that the essentials of an insurance transaction are, as generally understood, that the insurer undertakes, in return for prior payment of a premium, to provide the insured, in the event of materialisation of the risk covered, with the service agreed when the contract was concluded.
38 In the same judgment, after observing in paragraph 19 that it was common ground that the expression insurance transactions in Article 13B(a) of the Sixth Directive covered in any event cases where the transaction was carried out by the actual insurer who undertook to cover the risk insured against, the Court held in paragraph 22 that insurance transactions did not cover solely transactions carried out by the insurers themselves but was broad enough in principle to include the provision of insurance cover by a taxable person who was not himself an insurer but, in the context of a block policy, procured such cover for his customers by making use of the supplies of an insurer who assumed the risk insured.
39 In paragraph 21 of the judgment in CPP, cited above, the Court held that a company such as Card Protection Plan Ltd the applicant in the main proceedings in that case could be regarded as performing insurance transactions covered by the exemption in so far as it was the holder of a block insurance policy under which its customers were the insured. It thus procured for those customers, for payment, in its own name and on its own account, insurance cover by having recourse to an insurer, the Continental Assurance Company of London. For the purposes of VAT, therefore, a reciprocal agreement to supply services had been entered into between the insurer, Continental Assurance Company of London, and Card Protection Plan Ltd, on the one hand, and between Card Protection Plan Ltd and its customers on the other. That meant that a legal relationship had been created between Card Protection Plan Ltd, which offered insurance cover, and the insured, namely the persons whose risks were covered by the insurance.
40 However, it is clear that no such legal relationship would exist between Skandia and Livbolaget's clients in the context of the scheme postulated by the two companies in the main proceedings. Skandia would have no contractual relationship with persons insured with Livbolaget and would assume no liability in respect of the insurance business carried out, since all risks would devolve wholly upon Livbolaget which would preserve its status of insurer for the purposes of Swedish civil law.
41 According to the definition of insurance transactions set out in paragraph 17 of the judgment in CPP and cited in paragraph 37 of this judgment, it appears that the identity of the person supplied with the service is relevant for the purposes of the definition of the type of services covered by Article 13B(a) of the Sixth Directive and that an insurance transaction necessarily implies the existence of a contractual relationship between the provider of the insurance service and the person whose risks are covered by the insurance, namely the insured.
43 It follows from the above considerations that a cooperative arrangement under which one insurance company runs the business of another insurance company in return for remuneration at market rates, but without assuming the related liabilities, and the latter company concludes insurance contracts in its own name, does not constitute an insurance transaction within the meaning of Article 13B(a) of the Sixth Directive. Such an activity, remunerated at market rates, constitutes a service effected for consideration within the meaning of Article 2(1) of the Sixth Directive, and is accordingly subject to VAT.