# C_2007199EN.01000801.xml

| 25.8.2007 | EN | Official Journal of the European Union | C 199/8 |
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25.8.2007

EN

Official Journal of the European Union

C 199/8

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Judgment of the Court (Third Chamber) of 28 June 2007 (reference for a preliminary ruling from the VAT and Duties Tribunal, London — United Kingdom) — JP Morgan Fleming Claverhouse Investment Trust plc, The Association of Investment Trust Companies v The Commissioners of HM Revenue and Customs

(Case C-363/05) (1)

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(Sixth VAT Directive - Article 13B(d)(6) - Exemption - Special investment funds - Meaning - Definition by the Member States - Discretion - Limits - Closed-ended funds)

(2007/C 199/12)

Language of the case: English

Referring court

VAT and Duties Tribunal, London

Parties to the main proceedings

Applicants: JP Morgan Fleming Claverhouse Investment Trust plc, The Association of Investment Trust Companies

Applicants:

Defendant: The Commissioners of HM Revenue and Customs

Defendant:

Re:

Interpretation of Art. 13B(d)(6) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1) — Scope of the exemption of the management of pooled investment funds — Inclusion of closed-ended funds such as investment trust companies

Operative part of the judgment

| 1. | Article 13B(d)(6) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment must be interpreted as meaning that the words ‘special investment funds’ in that provision are capable of including closed-ended investment funds, such as Investment Trust Companies. |
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1.

Article 13B(d)(6) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment must be interpreted as meaning that the words ‘special investment funds’ in that provision are capable of including closed-ended investment funds, such as Investment Trust Companies.

| 2. | Article 13B(d)(6) of Sixth Directive 77/388 must be interpreted as meaning that it allows Member States a discretion in defining the funds located on their territory which are covered by the notion of ‘special investment funds’ for the purposes of the exemption provided for by that provision. However, in the exercise of that power, the Member States must respect the objective pursued by that provision, which is to facilitate investment in securities for investors through investment undertakings, while guaranteeing the principle of fiscal neutrality from the point of view of the levying of VAT on the management of special investment funds which are in competition with other special investment funds such as funds falling within the scope of Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), as amended by Directive 2005/1/EC of the European Parliament and of the Council of 9 March 2005. |
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2.

Article 13B(d)(6) of Sixth Directive 77/388 must be interpreted as meaning that it allows Member States a discretion in defining the funds located on their territory which are covered by the notion of ‘special investment funds’ for the purposes of the exemption provided for by that provision. However, in the exercise of that power, the Member States must respect the objective pursued by that provision, which is to facilitate investment in securities for investors through investment undertakings, while guaranteeing the principle of fiscal neutrality from the point of view of the levying of VAT on the management of special investment funds which are in competition with other special investment funds such as funds falling within the scope of Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), as amended by Directive 2005/1/EC of the European Parliament and of the Council of 9 March 2005.

| 3. | Article 13B(d)(6) of Sixth Directive 77/388 has direct effect, in that it can be relied on by a taxable person before a national court in order to challenge the application of national legislation alleged to be incompatible with that provision. |
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3.

Article 13B(d)(6) of Sixth Directive 77/388 has direct effect, in that it can be relied on by a taxable person before a national court in order to challenge the application of national legislation alleged to be incompatible with that provision.

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(1)  OJ C 271, 29.10.2005.

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