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Article: ZD Academy Seminars 2020 - VAT for Insurance & Financial Services

25 May 2020

Article: ZD Academy Seminars 2020 – VAT for Insurance & Financial Services


Date held: 14th & 21st May 2020

Author: Charles Vella

In this seminar we covered the VAT treatment for Insurance and Financial services, in two sessions, one devoted to the technical aspect and the second to the practical aspect.

The Financial Services sector in Malta has grown exponentially these last years in line with the economy. From a sector serving the domestic market up to the mid-1990’s, it has transformed to become an important pillar of the economy, a transformation predominantly driven by the onset of international financial services operators that have set up in Malta to conduct business, facilitated by corporate fiscal incentives and appropriate legal and regulatory frameworks. This in turn has generated a high demand for tax advisors, not least in the field of VAT given the intricate and complex treatment of financial services transactions from a VAT perspective.

In the first session the agenda kicked off with an outline of the basic VAT definitions, essential for determining whether a particular transaction falls within the scope of VAT, followed by a review of the five questions necessary to methodically analyse a VAT transaction to identify its correct treatment. We then moved on to explaining in detail the exemptions for insurance and financial services set out in the Malta VAT Act. The last part of the presentation was devoted to an overview of a selection of ECJ settled cases specifically related to the interpretation of the VAT exemptions for insurance and financial services transactions.

The second session started with a summary of the principles established in settled case law of the ECJ regarding insurance and financial transactions that are so essential in helping to arrive at a correct VAT treatment when analysing such transactions. This was followed by an outline of the possible VAT implications as a result of carrying out insurance and financial services transactions such as VAT registration and right of deduction of Input VAT. The third part was particularly challenging in that we presented seven practical scenarios concerning insurance and financial services with a view to enable the participants to be involved in their solution.

Whereas the evaluation forms that have been furnished electronically to the participants for compilation are not yet available, no analysis can be carried out in connection with the feedback.

However, we are certain that it was another successful seminar concerning a particularly complicated area of VAT that consolidates ZD Academy reputation of a premium training organisation that delivers technical excellence.