The Spanish General Directorate of Taxation (GDT) recently issued a binding ruling (V2139-19) regarding the VAT treatment of insurance claim payments.
In the matter that was the subject of the ruling, the insurance policyholder was a car repair shop that owned an insured car that’s linked to its economic activity. When the car was involved in an accident, the policyholder repaired the car. The policyholder made a claim under its insurance to cover the cost of the repairs and the insurance company paid the claim. In the ruling, the GDT addressed two key questions: who was the recipient of the service and whether the repair was a VAT taxable transaction.
Source BDO
