The parent company of a corporate group took out an insurance policy, the cost of which it recharged to its subsidiaries exempt from VAT. The French tax authorities challenged this VAT exemption on the basis that the parent company was not an insurer under French insurance code.
The Administrative Court of Appeal first restated the principle according to which the quality of being an insurer under French insurance code is not a relevant criterion for determining the applicable VAT regime.
Nevertheless, the Court refused to apply the exemption in the present case, pointing out to this end that the insurance contract concluded with the insurer only covered the parent company, not the subsidiaries themselves, for the risks attached to the sites operated by the subsidiaries, and that the parent company did not produce any contractual document between it and its subsidiaries (insurer/insured party relationship).
Therefore, it was not established that the parent company performed an insurance transaction for the benefit of its subsidiaries, nor acted as a disclosed agent.