Luxembourg newsflash — 26 March 2014: no VAT on management services for DC pension schemes
On 13 March 2014, the Court of Justice of the EU (ECJ) delivered a judgment in the ATP Pension Service A/S case (C-464/12) ruling that the management and administration charges of defined-contribution (DC) pension schemes may be exempted from VAT.
In accordance with this judgment, DC pension schemes may be regarded as ‘special investment funds’ because the risk of return on the collective investment is borne by the employee. In this respect, the ECJ identified three criteria to qualify DC pension schemes as ‘special investment funds’: the DC pension schemes must be funded by the persons to whom the retirement benefit is to be paid; the savings are invested using a risk-spreading principle; and the investors (i.e. the employees) bear the investment risk…
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