C-240/99

2. The purpose of the Sixth Directive National legislation relating to turnover taxes was to harmonise national laws establishing the basis of

1 — Original language: Italian. 4. Article 10 of Chapter 3 of the Mervär- 2 —OJ 1977 L 145, p. 1. desskattelagen (Swedish Law on VAT) gave

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effect to Article 13 of the Sixth Directive. to obtain a preliminary opinion in matters In the version published in the SFS,3 of taxation (Förhandsbeskedsinstitut). The Article 10 provides that the supply of need for a preliminary opinion on a VAT insurance services is to be exempt from matter is appraised by the Skatterättsnämn- VAT and defines insurance services as den (Revenue Law Board). Until 1998 the services whose provision constitutes insur- relevant application procedure was set out ance business within the meaning of the in Article 21 of the Mervärdesskattelagen Försäkringsrörelselagen (Law on Insurance and in the Lagen om Förhandsbesked i Business). Taxeringsfragor (Law on Preliminary Opi- nions on matters of tax assessment). Since 1 July 1998 the relevant provisions in relation to VAT are to be found in the Lagen (1998:189) om Förhandsbesked i Skattefrågor (Law on Preliminary Opinions on tax matters).

of whose subsidiaries is Livförsäkringsak- whether a commitment assumed by Skan- tiebolaget Skandia (publ) (hereinafter 'Liv- dia to run Livbolaget's business activities bolaget'). Livbolaget is wholly owned by could be regarded as a supply of insurance Skandia. services for the purposes of Article 10 of Chapter 3 of the Mervärdesskattelagen, thus qualifying for exemption from VAT.

11. Meanwhile, as stated in Skandia's sub- 9. Livbolaget is engaged in the business of missions, the two insurance companies life assurance, in particular, in the sectors of were embarking on the partial restructuring capital insurance and insurance provision of their respective businesses, transferring for old age. Livbolaget and Skandia have certain operations, particularly capital studied the possibility of merging (in the management, from Livbolaget to Skandia. broad sense) their insurance activities This entailed payment of SEK 20 million within a single company. One plan was to by way of VAT. transfer Livbolaget's staff and operations to Skandia so that, in effect, Skandia would be conducting all Livbolaget's business, whe- ther this consisted in the sale of insurance, the settlement of claims, the calculation of actuarial forecasts or capital management. In return, Skandia would receive from Livbolaget remuneration at market rates. Skandia would assume no liability in 12. On 15 January 1996, the Revenue Law respect of those insurance activities. All Board issued a negative opinion, which risks would devolve wholly upon Livbola- Skandia challenged before the Regerings- get which would preserve its status of rätten. Skandia relied in these proceedings insurer for the purposes of Swedish civil on an earlier opinion given by the Finans- law. inspektionen (Finance Inspectorate) to the effect that the business activities to be carried out by Skandia for Livbolaget were to be regarded as insurance business for the purpose of the relevant Swedish legislation.

14. Skandia appealed on a point of law to 16. Although, following registration of the the Regeringsrätten, relying on the judg- group, transactions between Skandia and ment of the Court of Justice in SDC,4 in Livbolaget on which — according to the which it was held that the exemption judgment of 16 June 1997 — VAT was provided for in points 3 and 5 of Arti- payable are now de facto exempt, the cle 13B(d) of the Sixth Directive, in relation Regeringsrätten takes the view that Skan- to various banking operations, was not dia's appeal on a point of law has not been subject to the condition that the service be deprived of purpose. In the first place, the provided by a specific type of institution exemption obtained following registration which has a legal relationship with the end of the group is not based on legislation customer of the bank. Skandia maintained which gave effect to Article 13B(a) of the that in the light of that ruling the judgment Sixth Directive in Swedish law. Secondly, of the Regeringsrätten ran counter to the that exemption, unlike the exemption pro- Sixth Directive as interpreted by the Court vided for by the Directive, does not arise of Justice and was accordingly flawed. automatically, but upon registration, which Skandia therefore applied for amendment is subject to approval by the tax autho- of the preliminary opinion and claimed that rities. The Regeringsrätten therefore the judgment should be set aside in favour believes that the issue in point in the main of a declaration that the commitment to be proceedings must be considered in the light assumed by Skandia was to be regarded as of Article 13B(a) of the Sixth Directive.

The question referred for a preliminary ruling

17. First of all, one brief remark. As I have just mentioned, 6since 1 January 1999 VAT 18. In essence, the national court is asking has not been payable 'on transactions whether the business activities that Skandia between Skandia and Livbolaget because these are transactions between companies 7 — On this point, see, in particular, Case C-241/97 Försäkring- which are members of a group registered in saktiebolaget Skandia [1999] ECR I-1879, paragraph SO. accordance with Article 1 of Chapter 6a of 8 — See point 11 of the present Opinion. 9 — Sec, in particular, Case 29/84 Commission v Germany [19851 UCR 1661, paragraph 23. See also Case 361/88 Commission v Germany [1991] ECR I-2567, paragraph 24, and Case C-197/96 Commission v France 1997] ECR 6 — Sec point 14 or the present Opinion. I-1489, paragraph 15.

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has undertaken to carry out for Livbolaget insured, that is to say — to all intents and fall within the scope of Article 13B(a) of purposes — with Livbolaget's clients.10 the Sixth Directive, thus qualifying for exemption from VAT.

actions'. It is common ground that the activities at issue in the main proceedings 10 — For a definition of 'insurance broker' and 'insurance do not fall into any of the other categories agent', see Council Directive 77/92/EEC of 13 December 1976 on measures to facilitate the effective exercise of provided for in Article 13. Above all, as freedom of establishment and freedom to provide services in respect of the activities of insurance agents and brokers Skandia itself makes clear, Skandia intends (ex ISIC Group 630) and, in particular, transitional to run Livbolaget's business operations measures in respect of those activities (OJ 1977 L 26, p. 14), and Commission Recommendation 92/48/EEC of without assuming any related liability. That 18 December 1991 on insurance intermediaries (OJ 1992 L 19, p. 32).

the insurer. Secondly, the business opera- EEC of 5 March 1979 on the coordination of laws, tions at issue cannot be classed as 'related regulations and administrative provisions relating to the taking up and pursuit of the business of direct life [insurance] services performed by insurance assurance (OJ 1979 L 63, p. 1); (c) Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, brokers and insurance agents'. Skandia regulations and administrative provisions relating to direct cannot be regarded as a broker or an agent, insurance other than life assurance and amending Direc- tives 73/239/EEC and 88/357/EEC (third non-life insur- since it has no legal relationship with the ance Directive) (OJ 1992 L 228, p. 1).

in the Sixth Directive'. 13 Taking that as its of the general rules as for VAT liability, premiss, Skandia goes on to refer to the Skandia concludes that a company operat- opinion issued by the Finansinspektionen 14 ing in the insurance sector must by defini- to the effect that the services which Skandia tion be exempt from VAT under Arti- plans to provide for Livbolaget constitute cle 13B(a) of the Sixth Directive. insurance transactions for the purposes of the Swedish law on insurance business practice, and concludes that since that was the instrument for transposing the Community directives into Swedish law, the business operations at issue must be regarded as exempt from VAT in accor- dance with Article 13B(a) of the Sixth Directive. 22. While there is no doubt that, in prin- ciple, the term 'insurance transactions' in the Sixth Directive must be interpreted in the light of the Community insurance directives, Skandia's reasoning cannot be accepted. Skandia's first argument is based solely on the opinion given by the Finans- inspektionen as to how the business opera- tions at issue are to be classified for the purposes of the Swedish legislation on insurance. Even though this legislation served to transpose the Community direc- tives into Swedish law, an opinion given by a national body concerning national legis- lation cannot be regarded as relevant for the purposes of the question referred by the 21. Secondly, Skandia points out that Arti- national court for a preliminary ruling. cle 8(1) of Directive 73/23 9/EEC concern- ing insurance, as amended by Article 6 of Directive 92/49/EEC,15 requires companies intending to operate in that sector to limit their objects to the business of insurance and operations arising directly therefrom, to the exclusion of all other commercial business. Consequently, according to Skan- dia, an insurance company may engage only in insurance business and, by defini- 23. In my view, Skandia's second argu- tion, all its business transactions constitute ment, too — concerning the restrictions insurance transactions. Given, therefore, placed by the insurance directives on the that the same meaning is to be attributed objects of insurance companies — is to the concept of insurance for the purposes unfounded because it is based on false premisses. In fact, the purpose of those restrictions is to avoid any diversification of 13 — CPP, cited above, paragraph 18. activity which might in some way increase 14 — See point 13 or the present Opinion. the risks inherent in insurance business by 15 — Both cited above. compromising the company's ability to

24. In order to answer the question referred by the national court, I believe reference must be made to CPP, cited above. In that judgment, the Court held that 'the essen- tials 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 Consequently, it seems to me, above all, event of materialisation of the risk covered, that the fact that the insurance directives with the service agreed when the contract place a limitation on the possible objects of was concluded'.20 The Court went on to insurance companies cannot support the state that '[i]t is not essential that the generalisation that all transactions carried service the insurer has undertaken to pro- out by such companies are insurance trans- vide in the event of loss consist in the payment of a sum of money, as that service may also take the form of the provision of 16 — See, in that regard, point 2 of the Opinion of Advocate General Alber in Case C-239/98 Commission v France assistance in cash or in kind', adding that [1999] ECR I-8936. 'the expression "insurance transactions" is 17 — See, on that point, Case 235/85 Commission v Netherlands broad enough in principle to include the [1987] ECR 1471, paragraph 18. 18 — Specifically, under Article 33(1) of the Sixth Directive, as provision of insurance cover by a taxable amended by Directive 91/680/EEC (OJ 1991 L 376, p. 1), '[w]ithout prejudice to other Community provisions, in person who is not himself an insurer but... particular those laid down in the Community provisions in procures such cover for his customers by force relating to the general arrangements for the holding, movement and monitoring of products subject to excise duty, [the] Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts'. 19 — See CPP, cited above, paragraph 23. 20 — CPP, cited above, paragraph 17.

26. It is true that, as Skandia maintains, 22 the Court held in SDC that with regard to points 3 and 5 of Article 13B(d) of the Sixth Directive, the identity of the end customer had no bearing on the question whether a transaction was exempted by By way of confirmation of that point, it that provision. However, the facts of that should be recalled that Article 13B(a) of case were different. It is clear from the the Sixth Directive expressly restricts the wording of the provision at issue in SDC exemption for transactions 'including that the exemption provided for applied to related services' to those performed by a whole series of operations involving insurance brokers or insurance agents. If certain banking transactions. The provi- the term 'insurance transactions' ought sions at issue were therefore amenable to a properly to be construed in accordance broad interpretation, encompassing differ- with the principles set out in SDC, 'related ent types of transactions. In the present

23 — Case C-149/97 Institute of the Motor Industry [1998] ECR 21 — CPP, cited above, paragraphs IS and 22. I-7053, paragraph 17. See also Case C-346/96 Blast [1998] ECR I-481, paragraph 18, and Case C-453/93 Bulthuis- 22 — Sec point 14 of the present Opinion. Griffioen [1995] ECR 1-2341, paragraph 19.

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services' would be understood as implicit in must be regarded as constituting a service the concept of insurance transactions, and effected for consideration within the mean- the addition of that specification in Arti- ing of Article 2(1) of the Sixth Directive, cle 13B(a) would be wholly redundant. and accordingly subject to VAT. 25

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SKANDIA

Conclusion

For the reasons set out above, I would suggest that the Court reply as follows to the question referred by the Regeringsrätten:

A commitment assumed by an insurance company to run the business of a wholly-owned subsidiary does not constitute an insurance transaction within the meaning of Article 13B(a) of the Sixth Directive.

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