ECJ C-643/22 ( BPL Pensioen) – 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-643/22 ( BPL Pensioen)).

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 statutory purpose of the applicant, an industry-specific occupational pension fund, is to ensure a sustainable and reliable pension scheme for members. The ten board members have been appointed by the employers, the employees and the pensioners.
According to the pension regulations laid down by the management board, the pension scheme is based on a pension benefit contract and the pension contract is deemed to be what has been agreed between the parties to the collective bargaining with regard to the pension.
The contribution is determined by the management board in consultation with the employees and the employers. The employers and the employees both pay part of the contribution. The total contribution is transferred to the applicant by the employer, who deducts the employee’s contribution from the employee’s salary.
Pension supplements are only granted if the coverage ratio is at least 110%, the amount of the allowance does not result in the applicant being unable to meet the statutory requirements applicable to own funds on time, and it has been verified that a comparable allowance can be granted in the future. The amount of the allowance is adjusted accordingly. The aim is to have pensions rise in line with the consumer price index. The allowances are paid out of the investment returns and not out of the contributions. However, no supplements have been granted in recent years.
The applicant has, inter alia, general reserves to absorb all non-investment risks and investment reserves to absorb price losses in the investment portfolio.

Questions

The question referred 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