Posted: 12 Jun. 2022 5 min. read

Membership fees of an association as insurance fee


Payments of insurance fees on the basis of a contract or insurance relationships arising in any other way are subject to insurance tax. An insurance contract is an agreement between several persons or associations of persons to jointly bear losses or damages that may form the subject of the insurance. Insurance remuneration is any service that is payable to the insurer for the establishment and execution of the insurance relationship.

Based on this, the Tax Appeals Court dealt in its decision of 10 December 2021, RV/ 7105971/2017 with the question of whether an agreement between an association and its members, on the basis of which the costs of veterinary bills are covered against payment of membership fees, is subject to insurance tax.


Facts of the case

The complainant is an association whose purpose is to help and support animals in need. In particular, the concrete consideration to the contributor consists in the provision of insurance cover in the form of absorption of the costs for veterinary bills, whereby only 24 % of the income was spent on this in the complaint period (2010 - 2014). Non-members also receive reimbursements of veterinary expenses. In addition to these services, the purpose of the association also includes other fields of activity for animal welfare (eg, taking over animal transport, telephone advice, veterinary advice, etc).

The income of the association is generated by donations and membership fees, which, in the opinion of the complainant, objectively form a single inseparable economic service due to their close ties.


Decision of the Tax Appeals Court

In line with the tax office, the Tax Appeals Court argued that the concept of insurances should be interpreted broadly and according to the special purposes of insurance tax law. Accordingly, any payment of insurance fees on the basis of a contract or insurance relationships arising in any other way is subject to insurance tax. Instead of the special requirements of the Insurance Contract Act and the Insurance Supervision Act, rather general insurance law is applicable.

With references in particular to literature on the German Insurance Tax Act, the Tax Appeals Court defines an insurance contract as a contract under the law of obligations in which contributions and the bearing of risks are exchanged against each other. Accordingly, a party undertakes to pay in the uncertain event of the occurrence of an adverse incident. Insurance contracts stand out from happiness contracts by the specific subject matter of the risk bearing, considering the moment of uncertainty.

In the opinion of the Tax Appeals Court, an insurance relationship is therefore a bilateral insurance relationship with mutual claims and obligations, although it is irrelevant whether there is a legal claim to the benefit (ie, in the present case, in particular to the absorption of costs for veterinary invoices). As a result, there is no need for a claim to be enforceable, but rather it is sufficient to be able to count on the support in good faith. A factual claim resulting from a typical community of danger is therefore satisfactory.

Finally, the Tax Appeals Court clarified that it is not necessary for the granting of insurance-like benefits to be the main purpose of the association. With regard to membership fees, the Tax Appeals Court also noted that the balance sheet items with membership fees are clearly shown in the balance sheets presented and are therefore clearly separated from donations.

The Tax Appeals Court thus affirms the existence of an agreement subject to insurance tax within the meaning of insurance tax law and dismisses the complaint as unfounded. The membership fees shown in the balance sheet are therefore to be used as insurance fees. An appeal to the High Administrative Court was denied.



An insurance relationship exists when a party undertakes to pay for an asset in return for remuneration in the uncertain event of the occurrence of an adverse incident. In the opinion of the Tax Appeals Court, insurances do not need to be based on a special contract. The Tax Appeals Court also made it clear that the granting of a legal claim for compensation for damages is not necessary, but rather that it is sufficient if the support could be expected in good faith.

Finally, it should be noted that although the policyholder owes the insurance tax, the insurer is liable for the tax and must pay it on behalf of the policyholder. In the present case, the membership fees are to be regarded as gross amounts. The insurance tax is therefore already included in the membership fees.


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Dr. Katharina Luka

Dr. Katharina Luka

Manager Steuerberatung | Deloitte Österreich

Katharina Luka ist Steuerberaterin bei Deloitte Wien. Ihre Tätigkeitsschwerpunkte liegen insbesondere in den Bereichen Körperschaftsteuer, internationales Steuerrecht und in der Umgründungsberatung. Sie ist zudem als Fachautorin und Fachvortragende tätig.