The purpose of the present Indirect Tax update is to provide clarifications in
relation to Circular 203 issued by the Tax Authorities on 16 May 2016 following the recent decision handed down by the Court of Justice (ECJ) on 17 March 2016.
Our Indirect Tax update highlights the importance of this decision in determining the criteria that should be taken into consideration when
interpreting the relevant article of the European VAT Directive as regards the
VAT exemption for insurance and reinsurance services, including related services performed by insurance brokers and insurance agents. The relevant article in the Cyprus VAT Legislation is transposed in paragraph 1 of Table B of Schedule 7.
The ECJ held that loss settlement services which are supplied by a third party in the name and on behalf of insurance companies, are not covered by the planned provision for VAT exemption.