AG Opinion: Dutch pension funds are not eligible for a VAT exemption
AG Opinion: Dutch pension funds are not eligible for a VAT exemption
As opposed to Luxembourg VAT legislation, which recognizes pension funds as Special Investment Funds (“SIFs”) that qualify for the fund management VAT exemption, in the Netherlands such VAT matter still gives rise to a strong debate. In the joined cases referred by the Dutch Court to the ECJ, several employee defined benefit pension funds argue that they are similar to collective investment funds, which would allow management services to be exempt from VAT.
In her Opinion, (AG) Kokott of the Court of Justice of the European Union (“CJEU”) concluded that the pension funds at hand are not sufficiently comparable to Undertakings for Collective Investment in Transferable Securities (“UCITS”) and therefore do not qualify for the VAT exemption for asset management services.
It is now up to the CJEU to render a final judgement. This ruling is primarily of interest to Dutch employee defined benefit pension funds and service providers supplying management services to them. However, should the CJEU follow the AG’s reasoning on the one-to-one comparability test of pension funds with UCITS, this could potentially raise questions regarding the VAT treatment of pension funds and/or other funds qualifying as SIFs in Luxembourg.
In her Opinion, (AG) Kokott of the Court of Justice of the European Union (“CJEU”) concluded that the pension funds at hand are not sufficiently comparable to Undertakings for Collective Investment in Transferable Securities (“UCITS”) and therefore do not qualify for the VAT exemption for asset management services.
It is now up to the CJEU to render a final judgement. This ruling is primarily of interest to Dutch employee defined benefit pension funds and service providers supplying management services to them. However, should the CJEU follow the AG’s reasoning on the one-to-one comparability test of pension funds with UCITS, this could potentially raise questions regarding the VAT treatment of pension funds and/or other funds qualifying as SIFs in Luxembourg.