European insurance and reinsurance industry welcomes European Commission's VAT Insurance and Financial Services Review

CEA, the Brussels-based representative organisation for the European insurance and reinsurance industry, welcomes the European Commission's VAT Insurance and Financial Services Review, presented today.

CEA Director General, Michaela Koller, said: "European insurers welcome the Commission's intention to provide the financial and insurance services operators with increased legal certainty on the scope of the VAT exemptions and to allow reducing the negative impact of non-deductible VAT on the costs of exempt operators".

In particular with regard to the scope of insurance-related services, the increased amount of case-law in the European Court of Justice (ECJ) is evidence of the lack of legal security on this topic until now. Hence, CEA welcomes that the draft VAT legislation now focuses on the nature of the activity performed, regardless the identity of the supplier.

Nevertheless, in CEA's view there are still outstanding issues of the Review that remain a concern to the insurance industry, such as the national coordination of the proposed VAT option to tax with the national-based insurance premiums taxes, in order to prevent any double taxation that might arise under the new legislation.

CEA is the European insurance and reinsurance federation. Through its 33 member bodies comprising of national insurance associations, CEA represents all types of insurance and reinsurance undertakings, e.g. pan-European companies, monoliners, mutuals or SMEs. CEA represents undertakings which account for approximately 94% of total European premium income. Insurance makes a major contribution to Europe's economic growth and development. European insurers generate premium income of EUR 1,065bn, employ over one million people and invest more than EUR 6,900bn in the economy.