The Court of Justice of the European Union (CJEU) issued a judgment finding that the value added tax (VAT) exemption for the management of “special investment funds” applies also to regulated funds—and may further apply for real estate funds—but that actual property management of such funds is excluded from the VAT exemption.
The judgment was issued on referral of questions from the Dutch Supreme Court. Read a summary discussion of the CJEU judgment in TaxNewsFlash-Europe
The CJEU found the term “special investment fund” is to be interpreted so as to prevent discrepancies among the EU Member States on the application of VAT to such investment vehicles. In this respect, collective investment undertakings within the meaning of the UCITS directive (and any other funds that have comparable features for them to be in competition with UCITS) would fall within the scope of the VAT exemption.
The CJEU took the position that under the VAT directive, special investment funds—to have characteristics identical to those of UCITS—must be subject to a specific state supervision. This position follows the approach taken for years in Luxembourg.
Read a December 2015 report [PDF 137 KB] prepared by the KPMG member firm in Luxembourg: VAT Update
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.