Irish Pensions Magazine Spring 2014
20
News
reclaim Irish VAT that has been paid (in cases where
the conditions set out above are met) or potentially,
future savings may be possible to the extent that
employers and trustees could amend agreements,
whereby employers contract for the investment
management services and are invoiced for them. In
such cases, the employer may be able to reclaim the
VAT charged.
ATP Case (C 464/12) - VAT Exemption for
Management of Defined Contribution
Funds?
In this case, the ECJ has been asked whether
defined contribution (“DC”) pension funds could
be considered to be “special investment funds as
defined by Member States” and thereby, benefit
from the fund management exemption.
The Advocate General (“AG”) released his Opinion
on 12 December 2013 in relation to this case. In
summary, the AG concluded that DC pension funds
are within the definition of “special investment
funds” for the purposes of the fund management
exemption.
Should the ECJ follow the AG’s Opinion, there would
be a basis for DC pension funds in Ireland to make
claims for overpaid VAT on historic management
charges. The AG’s Opinion in this case is interesting
as it lists the “relevant criteria” for determining if
a certain fund can qualify as a “special investment
fund for the purposes of the fund management
exemption.
The AG lists the following as “Relevant criteria”
• Several beneficiaries have to pool their funds to
spread the risk over a range of securities.
• The fund can only be considered a pooling of
the beneficiaries’ funds if the beneficiaries enjoy
an unconditional legal right with respect to their
investment
• The beneficiaries have to bear both the cost of the
fund and the risks of the investment, even though
the contributions can be paid by their employer as
part of their payment package. This will generally
be the case with respect to defined-contribution,
but not with respect to defined-benefit schemes
In summary, the AG’s opinion is that the term ‘special
investment funds as defined by Member States’
should include occupational pension funds where
such funds pool the assets of several beneficiaries,
and allow the spreading of the risk over a range of
securities.
The ECJ is not bound to follow the opinion of the
Advocate General, though it is generally guided by
them.
The judgement is due to be issued on 12March 2014,
so watch this space! There may be opportunities for
reclaims of VAT paid by DC schemes (potentially for
the last 4 years), if the ECJ follows the opinion of the
Advocate General.
Summary & Conclusions
In conclusion, as can be seen from the above, there
are opportunities for Irish pension funds to reclaim
VAT paid (and to consider whether new arrangement
could be put in place to achieve VAT efficiencies)
and we would advise all pension funds, trustees and
employers to consider their position.
Wheels Common Investment Fund Trustees Ltd, National
Association of Pension Funds Ltd, Ford Pension Fund
Trustees Ltd, Ford Salaried Pension Fund Trustees Ltd,
Ford Pension Scheme for Senior Staff Trustee Ltd v
Commissioners for Her Majesty’s Revenue and Customs
1
Fiscale eenheid PPG Holdings BV cs te Hoogezand
v
Inspecteur van de Belastingdienst/Noord/kantoor
Groningen,
2
ATP PensionService A/S v Skatteministeriet
3
Article 135(1)(g) Council Directive 2006/112/EC.
4
Deutsche Bank – Case C-44/11
Article Author
Article Author
Colm Blaney
Director
VAT Unit
PwC
Rachel Rossney
Senior Manager
VAT Unit
PwC
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
