- Ruling Against Special Investment Fund Status: The District Court of Gelderland determined that the pension fund in question does not qualify as a special investment fund under EU law, as the pension rights and benefits do not primarily depend on investment performance, meaning participants do not bear investment risk.
- Referral to the Court of Justice of the EU: The court plans to refer six cases to the Court of Justice of the EU for clarification on the criteria that define whether certain industry-wide pension funds should be classified as special investment funds, which would impact the VAT treatment of management services provided to those funds.
- Insufficient Evidence for VAT Exemption: The court found that the pension fund failed to provide adequate evidence to support its claim for special investment fund status, leading to the conclusion that the VAT exemption claimed by the pension fund should not be applied, aligning with the inspector’s decision to refuse the exemption.
Source Taxlive
Pension fund not a mutual investment fund due to lack of investment risk participants
- Pension Fund Status: The court ruled that the pension fund does not qualify as a special investment fund under the VAT Directive, as participants do not bear any investment risk, which is a key requirement for such classification.
- Investment Risk Analysis: The court determined that pension benefits are primarily based on employment income and years of service rather than investment performance, concluding that the pension rights and benefits do not depend primarily on the fund’s investment results.
- Insufficient Comparisons: The pension fund’s argument for comparability with other classified special investment funds was rejected due to a lack of concrete evidence regarding the legal and financial positions of participants in those funds. Consequently, the request for a VAT refund was denied.
Source Taxence
Dutch Court Rules Pension Funds Not Exempt from VAT as Investment Funds
Dutch pension funds X and Y sought a VAT exemption for asset management services, arguing they qualified as common investment funds. However, the EU Court of Justice ruled that participants only bear investment risk if pension benefits primarily depend on investment results. Consequently, the Gelderland District Court denied the pension funds’ appeals, finding they did not meet the criteria for a common investment fund because their participants did not primarily bear investment risk.
Source: futd.nl
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
