VAT recovery and pension schemes — ATP Pension Service A/S

The judgment in ATP PensionService A/S v Skatteministeriet (Case C-464/12) was delivered by the European Court of Justice on 13 March 2014. It was the latest in a line of cases concerning the VAT treatment of costs incurred by or in relation to pension schemes and represents good news for defined-contribution schemes. Whereas the case for exemption of management services provided to defined-benefit schemes suffered defeat in Wheels Common Investment Fund just more than a year ago, ATP marks a success for defined-contribution schemes on the same issue.

ATP Pension Service A/S provided services to pension funds in Denmark. Its main customer was PensionDanmark. PensionDanmark administers pension schemes on behalf of trade unions and employers in the public and private sectors. ATP operated a system that opened pension accounts for employees. These accounts were set up by ATP on behalf of the pension scheme members at a financial institution on the basis of information received from employers. ATP would handle payments to and from these accounts, maintain records and provide reports to the employees and employers.

ATP argued that its services should be exempt under either article 13B(d)(3) of the Sixth VAT Directive ‘transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection’ (what is now article 135(d) of Directive 2006/112/EC) or article 13B(d)(6) of the Sixth VAT Directive ‘the management of special investment funds as defined by member states’ (what is now article 135(g) of Directive 2006/112/EC). The Østre Landsret referred questions to the ECJ concerning both articles. However, of greatest interest was the question as to whether the expression ‘special investment funds’ covered pension funds of the type to which services were provided by ATP…

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