Court of justice: contracting out of back office activities.
On 7 November 2003 the European Court of Justice has ruled the case Staatssecretaris van Financiën v Arthur Andersen & Co. Accountants c.s.
In this case a taxable person (ACMC) has concluded an agreement with a (life) assurance company (UL) in which ACMC undertakes, for a certain remuneration and with the aid of qualified personnel who are expert in the insurance field, most of the actual activities related to insurance. These services include the taking of decisions that bind the insurance company to enter into insurance contracts and maintaining contact with the agents and, as the occasion arises, with the insured while the insurance contracts are concluded in the name of the insurance company and the insurance risk is borne by the latter.
In the light of all the information, it must be held that, although they contribute to the essence of the activities of an insurance company, the services rendered by ACMC to UL do not constitute services that typify an insurance agent.
Back office’ activities, consisting in rendering services, for payment, to an insurance company do not constitute the performance of services relating to insurance transactions carried out by an insurance broker or an insurance agent within the meaning of that provision. Read full text.
