The taxable person in this case renders services to companies incorporated by several pension funds. The shares in the companies are held by the pension funds and other investors. The companies' activities consist of acquiring new investors and purchasing, selling and exploiting real property. The companies do not have the resources to carry out these activities themselves and had outsourced the performance of the activities to the taxable person. As such, the taxable person has committed itself to carry out a range of activities, including acting as director under the articles of association, rendering administrative, financial and compliance services and managing funds, for which it has the right of disposal to acquire and sell real estate. Also, the taxable person is responsible for the day-to-day management of the real property (e.g., cleaning and maintenance).
In dispute is whether the fees charged by the taxable person are subject to the Dutch VAT exemption for management of collective investment funds. Not in dispute is that the various services constitute separate and distinct supplies for VAT.
On the one hand, it is clear that each of the customers of the taxable person has more than one investor. On that basis, the High Court considered the companies to be collective investment funds. The Supreme Court acknowledges this point, but also considers that according to case law from the CJEU, the purpose of the exemption is to help small investors. Moreover, the existing case law on this subject only concerns cases with investment funds that invested in shares. This raises the question for the Dutch Supreme Court of whether the exemption in the EU VAT Directive only applies if the capital of a company with more than one investor is invested in shares or if it also applies if the capital is invested in other values, such as real estate. In addition, the Dutch Supreme Court questions whether the day-to-day management of the real property is covered by the exemption for the management of collective investment funds.
The Dutch Supreme Court believes that it cannot provide definitive answers to these questions and refers to the CJEU for an explanation on the scope of the aforementioned exemption. The case is registered under case number C-595/13.