If a pension fund applies the average pay system for the benefits to its members, it does not fall under the VAT exemption for collective investment funds.
A foundation was an industry pension fund that administered a pension scheme for its employees. This foundation stated that its assets could be regarded as ‘assets raised for collective investment’. If that were the case, her services would be exempt from sales tax. The inspector took the position that the foundation does perform VAT-taxed services. The Court of The Hague must decide which party is right.
Both parties agree that the foundation:
- is not an undertaking for collective investment in securities (UCITS);
- is subject to special government supervision;
- its funding comes from the future pension recipients; and
- invests according to the principle of risk diversification.
Source Taxence
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