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09 March 2010
The Tax Agency has issued a resolution that clarifies the tax regime for activities ancillary to insurance and reinsurance activities.(1)
Article 10(1)(2) of Decree 633/1972 provides a value-added tax (VAT) exemption for insurance, reinsurance and annuity business. Article 10(1)(9) states that agency, mediation and brokerage activities relating to the transactions in Article 10(1) are also exempt from VAT. These provisions implement Article 135(1)(a) of EU Directive 2006/112/EC, which provides a VAT exemption for "insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents".
The agency observed that neither Italian nor EU VAT legislation expressly defines the terms 'insurance transaction' or 'activity ancillary to an insurance transaction'.
In light of the definition of 'insurance mediation' in Article 106 of Legislative Decree 209/2005, which is derived from EU law, the agency stated that the VAT exemption under Article 10(9) of Decree 633/1972 applies not only to:
"all contracts however implying the interposition on circulation of goods and services, including for instance, mandate, agency and mediation contracts, but also to:
any consultancy and assistance activity aimed at presenting and proposing insurance products; [and]
the collaboration, management or performance, especially in case of claims, of the executed insurance contracts."
Thus, the agency has clarified that 'exempt activities' include activities consisting of "the assessment of... risk and relevant coverage, claims management and debt recovery activities".
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