ECJ C-639/22 (X) – Questions – Does the exemption for the management of mutual funds apply to a pension fund?

On October 12, 2022, the ECJ received a request for preliminary ruling from the Netherlands (Case ECJ C-639/22 (X)).

Context:

Article in the EU VAT Directive

Article 135(1)(g) of Council Directive 112/2006/EC

Article 135
1. Member States shall exempt the following transactions:

(g) the management of special investment funds as defined by Member States;

Facts

The facts and legal context at issue in this case are substantially similar to those at issue in Case C-644/22. The differences are indicated below to the extent relevant.
In this case, the applicant is not an occupational pension fund, but a compulsory occupational pension fund for self-employed medical specialists. The Minister of Social Affairs and Employment may make participation in an occupational pension scheme compulsory.
The pension scheme is a defined benefit scheme. The retirement pension is set at an annual amount for each calendar quarter for which the member has been liable to pay contributions (the standard pension). That amount may be increased by the applicant’s management board, according to a certain formula, compared to the previous calendar year. If there are insufficient funds to do so, the applicant’s management board may refrain from increasing that amount.
Any profits of the fund accrue to the members and are used exclusively to increase all standard pensions. Profit sharing is thus part of the pension adjustment.
Participants also have some options. This allows them to choose to start the pension earlier or later or to continue participation voluntarily.

Questions

The question referred for a preliminary ruling is identical to the first question in Case C-644/22].
1) Must Article 135(1)(g) of the VAT Directive be interpreted as meaning that unit-holders in a pension fund such as the one at issue in the main proceedings can be regarded as bearing investment risk, and does this mean that the pension fund constitutes a ‘special investment fund’ within the meaning of that provision? Is it relevant in that regard:
– whether unit-holders bear an individual investment risk or is it sufficient that unit-holders as a collective – and no one else – bear the consequences of the investment results?
– what the magnitude of the collective or individual risk is?
– to what extent the amount of the pension benefit depends also on other factors, such as the number of years of pension accrual, salary level and the actuarial interest rate?

AG Opinion

Decision

Summary

Source