ECJ C-642/22 (Pensioenfonds voor Fysiotherapeuten) – 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-642/22 (Pensioenfonds voor Fysiotherapeuten)).

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.
The applicant is a compulsory occupational pension fund for physiotherapists and has drawn up pension regulations. The occupational pension scheme is classified as a defined benefit scheme.
The basis for calculating the amount of pension accrual (the pension basis) in any year reflects the participant’s professional income for that year, less a deductible set to a fixed amount. Professional income is the taxable salary of the salaried physiotherapist or the profit from the business of the self-employed physiotherapist.
The maximum professional income to be taken into account and the premium are set annually by the management board, with different amounts applying to salaried physiotherapists than to self-employed physiotherapists. Members can voluntarily accrue additional pension upon payment of a higher contribution. If the participant is insured for it, the accrual is continued on a non-contributory basis if the participant becomes permanently and completely incapacitated for work.
A supplement of 2% is granted annually. Depending on the applicant’s financial position, the management board may decide to grant an additional supplement. It is financed partly from contributions and partly from overperformance. If it is apparent that the pension liabilities cannot be covered, the management board must amend the regulations so that financial balance can be restored. If it is apparent that members’ contributions are higher than necessary, it may be decided to allocate the surpluses to improving pension rights and entitlements.

Questions

The question referred for a preliminary ruling is identical to the first question in Case C-644/22.

Question in ECJ 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