Pensions Pieces: VAT on pension schemes — possible further developments

Following the Wheels case and the PPG case, we now await a further decision on the VAT charges on pension schemes, relating to the case of ATP Pension Service A/S v Skatteministeriet. In December 2013, advocate-general Cruz Villalon issued his opinion in the case. An advocate-general’s opinion is issued to assist the Court of Justice of the European Union (CJEU), but the CJEU is not required to follow it. That said, the opinion is a good indicator of the court’s likely view and, when followed, often provides useful legal detail.

It was clear from the Wheels and PPG cases that the pension arrangements in these cases were not VAT-exempt ‘special investment funds’ under the Council Directive 77/388/EEC. However, the PPG case did allow VAT on scheme expenses to be claimed by the scheme employer and HMRC appears to be slightly relaxing its policies as a result. The interest in ATP, in the light of this, is that the argument is again raised that a pension scheme might be a special investment fund.

ATP Pension Service A/S is a Danish pension service company that does not, in fact, invest the fund. It administers contributions and payments out to beneficiaries and provides a platform for these services. However, its claim is that payments into and out of the pension fund itself should be VAT exempt because of the special investment funds exemption. Whether this is the case is the issue raised with the CJEU, and is the subject of the opinion from the advocate-general…

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