17
Irish Pensions Magazine Spring 2014
Analysis & News
individuals involved, including those who appear most
forthright and articulate, is not as thorough as it might
appear.
In planning every journey, it always helps to know
where you are starting from. An objective appraisal of
the groups individual and collective ability to monitor
and challenge investment professionals could be a
very valuable exercise, if only to ensure that the various
interests in the group are properly represented – and
documented.
If you would like to make an objective assessment of If
you would like to make an objective assessment of your
boards individual comfort with the investment process,
please visit the
website or click on the
link. If
you would like to contribute to a survey, please forward
your results t
(1) The Pension Governance Deficit: Still With Us,
Ambachsteer, Capelle & Lum, Rotman International
Journal of Psion Management, Volume 1, Issue 1, Fall
2008
Article Author
James Meenan
CEO
JNM Research
VAT Update
I
n the Winter 2011 Edition of this magazine, we
provided a brief update on VAT issues of relevance
to the pensions industry and highlighted the fact
that opportunities existed for VAT savings. In this
article, we will provide a further update; focusing
on certain Court of Justice of the European Union
(“CJEU”) cases which will represent both good
and bad news for Irish pension funds (and indeed
sponsoring employers).
Specifically, this article will focus on the potential
impact for Irish pension funds and employers arising
from the following CJEU cases:-
•
Wheels Case (C 424/11),
1
•
PPG Case (C 26/12)
2
, and
•
ATP Case (C 464/12)
3
In our previous article we referred to the fact that the
management of Irish pension funds is considered to
be a taxable service (at the standard rate of VAT,
currently 23%). This is on the basis that the fund
management exemption for specified collective
investment funds (contained in EU VAT law) has
been interpreted in an Irish context not to extend to
pension funds.
The wording of the EU VAT exemption is as follows:-
“management of special investment funds as
defined by Member States”
4
The rationale for exempting fund management was
essentially to put small investors in the same position
(from a VAT perspective) regardless of whether they
invest directly in securities or via a fund.
While VAT is a European tax, the wording of the fund
management exemption has led to differing VAT
treatments within the funds industry throughout
Europe. For example, HMRC in the UK shares the
view held by the Irish Revenue that pension fund
management is not VAT exempt. However, in certain
other EU Member States, such as, for example, Italy,
the management of pension funds is treated as
exempt.
In an Irish context, the fund management exemption
is contained in paragraph 6(2), Part 2, Schedule 1
of the VAT Consolidation Act, 2010 and has been
defined to include the “management” (as defined)
of specified entities such as regulated investment
funds, certain life funds, Section 110 securitisation
vehicles, amongst others, but not including pension
funds (except those investing in a unit trust scheme
established solely for the purpose of superannuation
fund schemes).
by Colm Blaney & Rachel Rossney
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