The Court of the European Union (CJEU) invalidated the interpretation of the tax authorities of Romania in a number of tax decisions made regarding taxpayers in the insurance market, finding that Art. 56 paragraph 1 letter c) of Directive 2006/112/EC should be interpreted in the sense that claims settlement services provided by correspondent companies on behalf of and on behalf of an insurance company are not part of the services provided by consultants, engineers, consulting offices , lawyers, accountants and other similar services, as well as from processing data or providing information, and VAT is not payable in Romania. The decision was made by D&B David si Baias and PwC Romania in cooperation with av.prof.dr Radu Bufan.

Essentially, the disputed issue in the main proceedings concerns the determination of the place of taxation for VAT purposes of claims settlement services provided by correspondent companies (headquartered in various member states of the European Union) for the benefit of an insurance company established in Romania, in in the context of which, as part of a series of fiscal audits carried out by insurance companies in Romania, ANAF considered that the claims settlement services provided by correspondent companies in their name and on their behalf would represent taxable transactions with VAT perspective in Romania, the place of supply being in the main office of the beneficiary, therefore in Romania, as the claim settlement services are part of the services provided by the engineers and as a result they have imposed an additional VAT payment. The reason given was mainly that the services provided by the correspondent companies would be similar to those provided by engineers and lawyers and thus the exception to the rule of fixing the place of taxation in the territory of the supplier would become incidental so that they should be taxed in Romania, at the main office of the beneficiary.

Read the rest of the article on the PwC Romania blog here