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An insurance assistant enquired whether commissions paid to third parties for customer acquisition are exempt from VAT. The DGT ruled that the exemption applies if the activity consists of seeking customers to put them in contact with the insurer, but not if it is merely advertising.
Question posed: Liability for the payment of commissions for customer acquisition paid to third parties.
Insurance customer acquisition services are exempt from VAT when they involve a customer search activity to put them in contact with the insurer. This exemption extends to external assistants performing mediation tasks on behalf of the insurer. Services provided by subcontracted agents whose function is merely the advertising of insurance services are not considered exempt.
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