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Abbey National plc v Customs and Excise Comrs: C-169/04
[2006] STC 1136, (2006) Times, 6 June, [2006] SWTI 1493, [2006] All ER (D) 44 (May)
Court: ECJ
Judgment Date: 04/05/2006
Cases considered by this case
Annotations: All CasesCourt: ALL COURTS
Sort by: Judgment Date (Latest First)
Treatment | Case Name | Citations | Court | Date | Signal |
Considered | Sparekassernes Datacenter (SDC) v Skatterministeriet | [1997] ECR I-3017, [1997] All ER (EC) 610, [1997] 3 CMLR 999, [1997] STC 932 | ECJ | 05/06/199 |
Catchwords & Digest
EUROPEAN COMMUNITY - VALUE ADDED TAX - EXEMPTIONS - FINANCIAL SERVICES - MANAGEMENT OF SPECIAL INVESTMENT FUNDS - MEANING OF 'MANAGEMENT' - WHETHER 'MANAGEMENT OF SPECIAL INVESTMENT FUNDS' COVERING SERVICES PERFORMED BY THIRD-PARTY MANAGER IN RESPECT OF ADMINISTRATIVE MANAGEMENT OF FUND - WHETHER 'MANAGEMENT OF SPECIAL INVESTMENT FUNDS' COVERING SERVICES CHARGED FOR BY DEPOSITARY - SIXTH COUNCIL DIRECTIVE (EEC) 77/388, ART 13B(D)(6)
Under art 13B(d)(6) of Sixth Council Directive (EEC) 77/388 (on the harmonisation of the laws of the member states relating to turnover taxes - Common system of value added tax: uniform basis of assessment) member states were required to exempt, under conditions which they would lay down for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any possible evasion, transactions for the management of special investment funds as defined by member states. In the course of two sets of proceedings between two parties and the Commissioners of Customs & Excise concerning the taxation of services supplied by the depositaries of a number of authorised unit trusts and of an open-ended investment company (OEIC), pursuant to arts 7 and 14 of Directive 85/611, national regulatory provisions and the relevant fund rules, and administration and accounting services performed by a third company delegated by the management company of an OEIC reference was made to the Court of Justice of the European Communities for a preliminary ruling on three questions.
The questions asked were: (i) whether the concept of 'management' of special investment funds in art 13B(d)(6) of the Sixth Directive had its own independent meaning in Community law whose content the member states could not alter; (ii) whether art 13B(d)(6) was to be interpreted in such a way that the concept of 'management of special investment funds' did not cover the administrative and accounting management services of the funds performed by a third-party manager; and (iii) whether art 13B(d)(6) was to be interpreted in such a way that the concept of 'management of special investment funds' did not cover the services charged for by a depositary, pursuant to arts 7 and 14 of Directive 85/611, national regulatory provisions and the relevant fund rules.
Held - (1) The concept of 'management' of special investment funds in art 13B(d)(6) had its own independent meaning in Community law whose content the member states could not alter. It was settled law that the exemptions provided for in art 13 had their own independent meaning in Community law which had to be given a Community definition whose purpose was to avoid divergences in the application of the VAT system from one member state to another. While art 13B(d)(6) conferred on the member states the task of defining the meaning of 'special investment funds' that task had not been extended to 'management'.
(2) Article 13B(d)(6) was to be interpreted as meaning that the concept of 'management of special investment funds' referred to in that provision covered the services performed by a third-party manager in respect of the administrative management of the fund, if, viewed broadly, they formed a distinct whole and were specific to, and essential for, the management of those funds. However, services corresponding to the functions of a depositary were not covered by that concept. Interpreting the provision in the light of the context in which it was used and of the aims and scheme of that directive, having particular regard to the underlying purpose of the exemption which it established, the transactions covered by the exemption were those which were specific to the business of undertakings for collective investment. Accordingly, the management services performed by a third-party manager came generally within the scope of the provision while the functions of depositary did not fall under the management of undertakings for collective investment but under the control and supervision of their activities and were therefore not within the scope of the provision.
