Mon, Oct 24, 2016
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. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. Other Voices: Follow the advice of investment consultants - I think not[more]

    Mark Rzepczynski, Founding Partner, Chief Investment Officer AMPHI Research and Trading, writes on Harvest Exchange: Investment consultants are a force to the reckoned with in the pension world. They advise and drive many pension decisions around the globe. Consultants literally control trillion