What about your pension and VAT?

Not really a question to ask students, of course I understand that. Nevertheless, in recent years there has been a lot of discussion about VAT and pension funds. Why? Pension funds often outsource the asset management of their securities investments to third parties.

21% VAT is due on that outsourced management. Due to the exempt activities of pension funds, this VAT is not deductible.

A VAT exemption applies to the same asset management services to investment funds. However, this exemption does not apply to pension funds that operate a pure defined benefit (DB) pension scheme. In 2013, the European Court of Justice decided this in the Wheels case. However, a year later, in 2014, the court ruled that this VAT exemption can apply to defined contribution (DC) pension schemes.

Source Erasmus University Rotterdam

See also – Preliminary rulings asked by a Dutch Court to the ECJ on the exemption for the management of mutual funds