As you know, transactions for the provision of insurance, co-insurance or reinsurance services to persons licensed to conduct insurance activities in accordance with the law, as well as related services of insurance (reinsurance) brokers and insurance agents are not subject to value added tax (hereinafter – VAT). Are the insurance payments transactions subject to VAT?
Transactions for the provision of insurance, co-insurance or reinsurance services to persons licensed to conduct insurance activities in accordance with the law, as well as related services of insurance (reinsurance) brokers and insurance agents are not subject to VAT. Such a rule is provided for in subitem 196.1.3 item 196.1 Art. 196 Chapter V of the Tax Code of Ukraine No. 2755-VI of December 2, 2010.
According to Art. 9 of the Law of Ukraine “On Insurance” No. 85/96-ВР of March 7, 1996, insurance payment is a sum of money paid by the insurer in accordance with the terms of the insurance contract in case an insured event occurs.
The amount of the sum insured and (or) the amount of insurance payments are determined by agreement between the insurer and the insured during the conclusion of the insurance contract or amendments to the insurance contract or in cases provided by applicable law.
That is, since the provision of insurance and reinsurance services is not subject to taxation, the insurance payments are also not subject to VAT and the operation of obtaining such insurance payments or the operation of their payment does not change the amount of tax credit or tax liabilities of the insured person or insurance company (insurer).
