ECJ rules on closed-ended funds

摘要

UK VAT legislation contains a provision for exempting services of managing open-ended investment companies. There is no corresponding prescribed exemption for managing closed-ended investment funds, such as investment trust companies. JP Morgan Fleming Claverhouse Investment Trust PLC believed that this was discriminatory and contrary to European Union law. A UK VAT tribunal referred the point to the European Court of Justice, which has now ruled that such investment trust companies were included within the exemption contained in the EU legislation. Even though discretion was available to member states to limit the exemption, there had to be good reasons for doing so and none were apparent here. Thus, under directly effective rights, companies such as the appellant should be managed on a VAT-exempt rather than VAT-chargeable basis.