- The VAT Directive (2006/112/EC) references “negotiation” and “management” in relation to financial services exemptions but lacks definitions, leading the Court of Justice of the European Union (CJEU) to provide interpretations on these terms.
- “Negotiation” is understood as a distinct mediation service aimed at facilitating contracts between parties, which can include activities such as identifying opportunities and negotiating terms, potentially allowing related advisory services to also qualify as exempt negotiation services.
- Conversely, “management” refers to the administration of financial products, with exemptions applying to credit management and special investment funds, while management of other securities, including discretionary portfolio management, is generally taxable unless explicitly exempted under specific conditions laid out in relevant court cases and directives.
Source Joseph Sammut
See also
- ECJ case C-235/00 (CSC Financial Services) – The supply of a mere physical, technical or administrative service related to transactions in securities is not exempted – VATupdate
- ECJ Case C-169/04 (Abbey National) – Management activities for investment funds completely exempt from VAT – VATupdate
- ECJ Case– C-464/12 (ATP PensionService) – Asset management still exempt from VAT for certain pension funds – VATupdate
- ECJ case C-595/13 (Fiscale Eenheid X) – VAT exemption for the management of special investment funds may also apply to funds investing in real estate – VATupdate
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