VATupdate

Commentary on ECJ cases on “management of special investment funds”

According to Art. 6 (1) 8 (i) of the Austrian VAT law 1994, the revenue from the “management of special investment funds”, the “management of holdings in the context of the business of providing capital … by undertakings holding a concession for this purpose”, as well as from the “management of special investment funds as defined by the other Member States” is exempt from VAT. This legal regulation corresponds to Art. 135 (1) (g) of the European VAT Directive with the aim of fiscal neutrality which does not allow economic operators who carry out similar transactions to be treated differently for tax purposes. According to the principle of fiscal neutrality, it has to be ensured that economic operators are able to choose the form of investment which best suits them – not facing the risk that their operations could be excluded from the tax exemption. Therefore, this regulation intends to protect small investors who would otherwise have a disadvantage compared to large investors who invest directly without being burdened with administration fees.

Source WTS

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