Wed, Aug 16, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Two European Court of Justice decisions offer little clarity for investment firms and VAT

Wednesday, March 20, 2013

Bailey McCann, Opalesque New York: Two recent decisions of the European Court of Justice (ECJ) on the value added tax (VAT) treatment of investment management services illustrate that this is still an area of some uncertainty that is continuing to evolve. The first decision, in the GfBk case, looked at the nature of the services that benefit from VAT exemption and held that fund investment advisory services could benefit. The second decision, in the Wheels case, looked at whether a pension scheme was a special investment scheme for VAT exemption purposes and held that it was not.

Investment funds do not typically have the right to deduct VAT, meaning that any VAT incurred is a cost which reflected in the net return on investment. According to a briefing from law firm Dechert, the VAT Directive provides a specific VAT exemption for the management of "special investment funds", with EU member states allowed to define which funds qualify. Most EU member states limit the application of the exemption to regulated funds.

Attorneys note that in the Abbey National case, the ECJ had clarified that the VAT exemption applied to all services which are "specific" to the management of an investment fund. "If management services are delegated to a third party, the delegated services should benefit from the VAT exemption as well, provided they are distinct, specific to and essential for the management of the investment fund. In other words, the exemption did not just a......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Crisis risk offset; about time?[more]

    This article was authored by Russell Barlow, global head of hedge fund solutions at London-based Aberdeen Asset Management. Like the ubiquitous force of gravity, when financial markets rise they must fall. The quest

  2. Comment: "Long-Term Investing": What managing drawdown risk can do to your long-term returns[more]

    Matthias Knab, Opalesque: Real Investment Advice writes on Harvest Exchange: Last week, I was having lunch with a prospective portfolio management client discussing the curre

  3. Jasper Capital International joins Hedge Fund Standards Board[more]

    Komfie Manalo, Opalesque Asia: Diversified and systematic investment firm Jasper Capital International has become the second China-based signatory to the Hedge Fund Standards Board (HFSB), an organization that brings hedge fund managers and investors together to set standards for the hedge fund i

  4. FinTech - Have you heard of NEO "the Chinese rthereum"? Well it's up 13000% this year, Bitcoin exchange operator sued in Singapore, Robot takeover postponed as quant funds flattened in equities[more]

    Have you heard of NEO "the Chinese rthereum"? Well it's up 13000% this year From Linkedin.com: China is the world's largest market for FinTech by far. But up to this point, it is yet to have a domestic cryptocurrency reach to heights like Bitcoin (BTC) or Ethereum (ETH). That's about to

  5. Investing - Hedge-fund honchos including David Tepper are loading up on Alibaba, Billionaire hedge fund manager Stanley Druckenmiller is betting big on the Chinese consumer, Big-name U.S. hedge funds shed healthcare stocks during the rally in second-quarter, U.S. hedge funds bearish on FAANG stocks in second-quarter, Hedge fund titan Viking Global made a $680 million bet on scandal-plagued Wells Fargo[more]

    Hedge-fund honchos including David Tepper are loading up on Alibaba From CNBC.com: David Tepper's Appaloosa Management and three other he ge funds took new stakes in Chinese e-commerce giant Alibaba in the second quarter, according to the latest quarterly filings. Appaloosa disclos