Zeeland-West Brabant District Court ruled that the liability insurance premium charged by the hospital to medical specialists is not subject to VAT. The ruling is also relevant to other situations where insurance premiums are passed on.
The case concerns a hospital, where specialist medical care is provided by medical specialists employed by the hospital and by free-standing doctors. All medical acts are performed under the responsibility and at the risk of the hospital. The hospital has taken out central liability insurance. The premiums for this insurance are partly passed on to the medical specialists. The tax authorities consider that the hospital has to pay 21% VAT on these recharged premiums.
The Court, however, ruled that the hospital was not performing a service against the premium charged to the medical specialists. This is because the medical specialists are explicitly listed as (co-)insured on the liability insurance policy. As such, they can claim the insurance directly, separately from the hospital, from the insurer. As a result, the insurer and not the hospital performs the (insurance) performance towards the medical specialists.
The court further considered that if the hospital did provide a service to the medical specialists, this service would have been exempt from VAT under the insurance exemption.