Judgment;Summary — ECLI:EU:C:2021:491
Date: 2021-06-17
Language of the case: German
Court formation: First Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Austria

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
4 February 2020 
Referring court: 
Bundesfinanzgericht (Austria) 
Date of the decision to refer: 
30 January 2020 
Appellant: 
K 
Respondent authority: 
Finanzamt Linz  
  
Subject matter and legal basis of the dispute in the main proceedings and the 
request for a preliminary ruling 
Exemption from value added tax (‘VAT’) of an outsourced activity (performance 
of certain tax-related tasks) in connection with the management of special 
investment funds pursuant to Article 135(1)(g) of Directive 2006/112/EC  
Question referred 
Must Article 135(1)(g) of Directive 2006/112/EC be interpreted as meaning that 
the term ‘management of special investment funds’ also covers the tax-related 
responsibilities entrusted by the management company to a third party, consisting 
of ensuring that the income received by unit-holders from investment funds is 
taxed in accordance with the law? 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-58/20 
 
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Provisions of EU law cited 
135(1)(g) of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax  
Article 1(2) and Article 5g of, and Annex II to, 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securities (UCITS) (as repealed by Directive 2009/65/EC of the European 
Parliament and of the Council of 13 July 2009) 
National legislation cited 
Paragraph 6(1).8(i) of the Umsatzsteuergesetz 1994 (Law on Turnover Tax 1994, 
‘UStG 1994’, BGBl. [Federal Law Gazette] No 663/1994, in the versions BGBl. I 
No 24/2007 and BGBl. I No 112/2012) 
Investmentfondsgesetz 1993 (Law on Investment Funds, ‘InvFG 1993’, BGBl. 
No 532/1993 as amended by BGBl No 69/2008), in particular Paragraph 40, and 
the Investmentfondsgesetz 2011 (Law in Investment Funds, ‘InvFG 2011’, BGBl. 
I no. 77/2011), in particular Paragraphs 2(1).1, 3(2).1 and 2, 5(1) and (2).1, 28, 
30(4), 42 and 186 
Court of Justice case-law cited 
Judgment of 4 May 2006, C-169/04, Abbey National plc; judgment of 7 March 
2013, C-275/11, GfBk Gesellschaft für Börsenkommunikation mbH; judgment of 
13 March 2014, C-464/12, ATP PensionService A/S; judgment of 9 December 
2015, C-595/13, Fiscale Eenheid X NV cs; judgment of 5 June 1997, C-2/95, 
SDC; judgment of 13 December 2001, C-235/00, CSC; judgment of 26 May 2016, 
C-607/14, Bookit Ltd; judgment of 25 July 2018, C-5/17, DPAS Ltd; judgment of 
3 October 2019, C-42/18, Cardpoint GmbH; judgment of 28 July 2011, C-350/10, 
Nordea; judgment of 6 October 1982, 283/81, CILFIT 
Brief summary of the facts and procedure 
1 Between 2008 and 2014, various investment management companies (‘IMCs’; 
according to the terminology of the Investmentfondsgesetz 2011: ‘management 
company’) outsourced certain activities for the determination of taxable figures at 
the level of unit-holders to K, the appellant. K invoiced for the activities — which 
it provided in accordance with specific rules on income tax and investment funds 
and which ultimately did not relate to the principal activity of the management of 
the portfolio but to the lawful taxation of the unit-holder’s income from the 
fund — without VAT given that, in the opinion of K, those activities came within 
the tax exemption for the management of special investment funds provided for in 
K 
 
3 
Paragraph 6(1).8(i) of the UStG 1994 (Article 135(1)(g) of Directive 
2006/112/EC). In the tax authorities’ view, the exemption does not apply given 
that the activities are neither specific to nor essential for the exempt management 
activities and that they did not form a distinct whole, as required by the Court of 
Justice. 
2 An IMC is obliged to provide to unit-holders all the information required for them 
to comply with their disclosure and evidential obligations under tax law. In 
particular, the IMC was also under a statutory obligation to declare the taxable 
figures for the taxation of the unit-holders’ income, for which the IMC was liable. 
To that end, the IMC was required to carry out various tax calculations. The 
statutory provisions regarding such operations are ultimately designed to ensure 
the correct taxation of income from funds in the hands of unit-holders. 
3 K had been instructed by several IMCs to draw up the tax statement and the 
standardised declaration. The depositary bank to which the fund accounting was 
outsourced provided the relevant figures from the fund’s accounts to K. Formally, 
however, the IMC maintained the position of tax representative which transmitted 
the declaration to the reporting office. The IMC instructing K adopted the tax 
statements and/or declaration of the relevant tax figures drawn up by K without 
any changes and transmitted the data to the reporting office. 
4 In addition to the comprehensive management tasks performed by the IMC 
instructing K, they have also outsourced various management tasks to different 
third parties. One of those outsourced activities entrusted to K involves drawing 
up the tax statement and drafting the declaration of the relevant tax data in 
accordance with the process described above on the basis of the data provided by 
the IMC.  
5 Given the complexity of the tax-related aspects of the taxation of investment fund 
income and the liabilities enshrined in law, this task was often outsourced to third-
party service providers. Such outsourcing, which is expressly permitted by law, 
does not affect the IMC’s liability, however; the latter remains strictly liable in 
relation to third parties for the conduct of the sub-contractor. Inter partes, K was 
liable to the IMC in accordance with the general rules of civil law in the event of 
loss suffered due to an inaccurate declaration of the taxable figures. K was not 
liable for the IMC’s tax-related investment decisions. Nor did the activity 
outsourced to K include the determination of the values of the investment fund 
units. 
6 K brought an action before the referring court, the Bundesfinanzgericht (Federal 
Finance Court, Austria), objecting to the income tax demands issued by the tax 
office for 2008 to 2014, by which K was ordered to pay VAT for these services.  
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Principal arguments of the parties in the main proceedings 
7 According to the tax authorities, it is apparent from the relevant judgments of the 
Court of Justice on the exempt management of a special investment fund that the 
activities listed in Annex II to the UCITS Directive might be exempt in any event 
if they were provided by the IMC itself. In that case those activities would be 
fund-typical in any event. If, however, these activities were provided by a third-
party manager, it was necessary to examine whether they were specific to, and 
essential for, the management of a special investment fund and, viewed broadly, 
formed a distinct whole. According to the judgment of the Court of Justice in 
GfBk this requires that the outsourced management activity is intrinsically 
connected to the management of fund assets stricto sensu (portfolio management). 
According to that judgment, the specific activity of an IMC consists in the 
collective investment in transferable securities of capital raised from the public. 
The determination of the taxable figures in order to meet the tax obligations of the 
unit-holders is not in itself characteristic of the management of a special 
investment fund. Rather, those services are typical for the services provided by 
chartered accountants and comparable professions.  
8 The determination of the taxable figures to be used in the tax statement and the 
declaration to be transmitted to the reporting office constitute merely a 
preliminary activity in order to comply with the tax-reporting obligation to be 
discharged by the IMC’s tax representative. Such activities are not specific to the 
management of special investment funds, nor do they constitute an essential part 
of the activities listed in Annex II to the UCITS Directive. Furthermore, the 
provision of preliminary services to enable the declaration of the taxable figures 
by another person does not, viewed broadly, form a distinct whole. They would 
only form a distinct whole if essential central administrative activities, such as 
those listed in Annex II, were to be transferred and those activities, taken as a 
whole, formed a distinct whole and were specific to and essential for the 
management of a special investment fund. The mere reference to an activity listed 
in Annex II to the UCITS Directive is not sufficient in itself. The low fee paid for 
K’s services is another argument in favour of the existence of merely ancillary 
services. 
9 By contrast, according to K, paragraph 22 of GfBk and paragraph 77 of Fiscale 
Eenheid show that, in addition to central portfolio management, functions specific 
to the management of a special investment fund include the associated 
administrative activities (in particular those listed in Annex II to the UCITS 
Directive). By no means is it necessary to outsource a distinct whole of 
administrative activities. On the contrary, individual activities could also be 
outsourced whilst qualifying for the exemption provided that they are intrinsically 
connected to the IMC’s own typical activity. Given that, according to the case-law 
of the Court of Justice, the activities listed in Annex II are specific to the 
management of special investment funds, services intrinsically connected to such 
activities must also be capable of being exempted. 
K 
 
5 
10 If an activity which the IMC would otherwise have to carry out itself as a result of 
existing legislation were to be outsourced, this would constitute an intrinsic 
connection to an activity specific to the management of special investment funds. 
The activities of determining the relevant taxable figures for purposes of taxing 
unit-holders, as carried out in the case at hand, exist only in the field of investment 
funds, which means that, in any event, they constitute an activity that is specific to 
and essential for funds. Activities such as those for the control and supervision of 
the activity of an IMC, which must strictly be outsourced to a depositary 
(depositary bank), are not permitted to be provided by an IMC itself and cannot 
therefore be specific to its activity. That is why, in Abbey National, the Court of 
Justice rejected the applicability of the exemption provided for in 
Article 135(1)(g) of Directive 2006/112/EC in respect of such activities.  
11 In response to the general argument of the tax authorities that the determination 
and declaration of the taxable figures by a tax representative are services typically 
provided by chartered accountants in their professional capacity, K argued first 
that there are many IMCs which carry out the functions of the tax representative 
under their own responsibility. Second, there are several credit institutions which 
act as tax representatives for investment funds that do not manage themselves. 
12 Furthermore, as regards the criterion of ‘viewed broadly, form a distinct whole’ it 
is not necessary to outsource almost all of the management activity; it is sufficient 
for the outsourced activity to constitute a distinguishable management activity. 
This criterion is met in any event given the preparation of the tax treatment of 
each unit and the determination of the taxable figures to be declared. Even though 
figures from the earnings statement and/or fund accounts are used in that process, 
the fact remains that those figures frequently need to be adapted to the taxation of 
earnings using specific expertise. It follows from GfBk that the formal declaration 
sent to the reporting office by the IMC does not alter this finding given that, in 
GfBk, the IMC had also reserved the right to make the final decision. 
13 In order for the management activity to be essential, it is sufficient for the activity 
to be significant and typical for the proper management of the collective holdings 
and for it to have a certain importance in that regard. The exemption would, 
ultimately, apply to an outsourced activity where that activity replaces a 
management activity intrinsically connected to an activity which is generally 
carried out by the IMC, and if the service provided constitutes a distinguishable 
and not merely an ancillary management activity. 
14 Given that, under the provisions of the InvFG, the IMC is obliged to provide the 
unit-holder with all the information necessary to discharge his tax obligations and 
that, to that end, the IMC must also draw up the tax statement and the declaration 
of the taxable figures and ensure that they are published, this constitutes an 
activity typical and specific to the management of a special investment fund. This 
is also borne out by the fact that Annex II to the UCITS Directive lists the drawing 
up of tax returns as an administrative activity. The term ‘tax declarations’ does not 
only cover the drawing up of formal tax returns, but also any activity to discharge 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-58/20 
 
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tax-related obligations. The level of fees paid for the activities outsourced to K, 
which the tax authorities considered to be low, was arrived at due to various 
synergies with other service relationships between K and the outsourcing IMC. 
Summary of the reasons for the request for a preliminary ruling 
15 The Court of Justice has on several occasions examined the interpretation of the 
exemption provided for in Article 135(1)(g) of Directive 2006/112/EC for the 
management of special investment funds as defined by Member States and has 
held that management activities transferred to a third-party manager may also be 
covered by the exemption where those activities fulfil the specific, essential 
functions of the management of special investment funds and, viewed broadly, 
form a distinct whole (see the judgments cited above). However, in view of the 
divergent interpretation of those criteria by the parties in the context of the 
pending administrative proceedings and the conflicting objectives — on the one 
hand, the scope of application is intended to be broad so as to ensure that small 
investors are able to spread widely their capital in transferable securities through 
the intermediary of investment funds whilst being exempt from VAT and, on the 
other hand, the terms used to define the aforementioned tax exemption must be 
interpreted narrowly since they constitute an exception — the referring court 
considers that justified doubts remain as to how the term ‘management of special 
investment funds’ is to be interpreted in a manner consonant with EU law. The 
questions at issue arise in particular because the outsourced activities are not 
intrinsically connected to the principal activity of portfolio management, which 
consists of the direct collective investment of capital raised from the public. The 
present case concerns purely administrative activities in the interest of lawful 
taxation of income received by the unit-holder in accordance with specific 
provisions under the law on tax and investment funds, which may have a 
sufficiently intrinsic connection to the administrative activities listed in Annex II 
to the UCITS Directive for the exemption to apply. In addition, the question arises 
as to whether the service element covered by K constitutes a distinct whole, as 
required.  
16 The objective of the exemption clause, which must be taken into account for the 
purposes of interpretation, is to facilitate investment in securities for small 
investors by means of investment undertakings. It is intended to ensure that the 
common system of VAT is fiscally neutral as regards the choice between direct 
investment in securities and investment through undertakings for collective 
investment (Court of Justice, Abbey National, paragraph 62). Activities specific to 
and typical of the management of special investment funds must therefore be 
capable of being outsourced without incurring VAT in order to avoid accidental 
increases in costs. Thus, in GfBk (paragraph 31), the Court of Justice also held that 
an undertaking which provides the exempt activity connected to the management 
through its own staff must not be given an advantage over an undertaking that 
outsources such activities. Questions are, however, raised by the fact that, 
according to the case-law of the Court of Justice, exemption provisions, which 
K 
 
7 
constitute exceptions, must generally be interpreted narrowly and that, therefore, 
any criteria set by the Court which might restrict the exemption (specificity, 
essential character and distinctiveness of the activity) might run counter to the 
objective of the exemption which needs to be taken into account. 
17 The aforementioned judgments of the Court of Justice in SDC, CSC, Bookit, 
DPAS and Cardpoint concerned exempt financial services, such as transactions 
concerning payments and transfers or transactions in specific securities, referred 
to specifically in the VAT Directive. By contrast, in the present case the 
applicability of the exemption for the transaction ‘management of special 
investment funds as defined by Member States’, which is significantly broader, is 
in dispute. In that regard, the Court of Justice states for instance (see paragraph 66 
of SDC) that a service specific to a transaction concerning transfers must have the 
effect of transferring funds and entail changes in the legal and financial situation. 
The Court’s statements as to the specific nature of the actual financial services 
cannot therefore unreservedly be applied to the wider ‘management of special 
investment funds’, in the sense that a service can be specific only if it has a direct 
impact on the financial situation of the fund (portfolio management stricto sensu). 
It is clear from Fiscale Eenheid (paragraphs 72, 73 and 77) that, in addition to 
portfolio management functions, the administrative functions of undertakings for 
collective investments (UCITS), as listed in Annex II to the UCITS Directive 
(which are not exhaustive), are specific functions. By the Court expressly not 
accepting, in Abbey National, the argument of the Commission and the United 
Kingdom that a restrictive interpretation of the concept of ‘management of special 
investment funds’ was required, the management of a special investment fund is 
not, in principle, limited to portfolio management stricto sensu. The Court’s 
statements in that regard concerning the specific nature of the exempt financial 
services specifically listed cannot therefore be applied to the management of 
special investment funds. The exemption is not limited to the ‘collective 
investment of capital raised from the public’ but generally to the ‘management of 
a special investment fund’. As regards general statements relating to the tax 
exemption of an outsourced service, however, the referring court considers that it 
is possible to have recourse to the judgments cited above. The question remains as 
to whether, in the interest of the correct taxation of the unit-holder, the 
determination of taxable income of an investor and an investment fund is specific 
and essential for the management of a special investment fund and whether that 
activity forms a discrete whole. 
Assessment in the light of the purpose 
18 The Abbey National case concerned, on the one hand, services provided by a 
depositary to ensure compliance with the law and the fund provisions and, on the 
other hand, various administrative and accounting activities provided by a third-
party manager (on the latter point, see the assessment of the intrinsic connection 
below). 
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19 As regards the services provided to ensure compliance with the law and the fund 
provisions, the Court of Justice held that these were not specific to the 
management of a special investment fund. The Court justified that conclusion by 
stating that the purpose of the activities at issue was not to form and manage 
portfolios with funds paid in by investors when purchasing units. Instead, the 
purpose of those services was to ensure that undertakings for collective 
investment were managed in accordance with the law. Thus, those functions do 
not form part of the management of undertakings for collective investment but 
belong to the control and supervision of their activities. 
20 In the view of the referring court, the Court of Justice does not focus on the 
question whether the activity was outsourced by law or by contract, but looks 
solely at the purpose of the activity. While, in the interests of investor protection, 
the supervisory activities of a depositary bank seek to ensure that funds are 
managed in compliance with the law, the specific activity of an IMC is aimed at 
facilitating collective investment in securities for small investors and managing 
the portfolios formed. The exemption of that activity is aimed at ensuring that the 
fees paid by investors do not incur VAT, as is the case for direct acquisitions and 
management of securities. 
21 In Fiscale Eenheid (paragraph 77 and 78) the Court of Justice also focusses on the 
purpose. Applied to the present case, this could have the following consequence: 
management and accounting activities the purpose of which is to ensure that the 
income of unit-holders is taxed in accordance with the law are not specific to the 
activity of a fund but occur in the context of various ways of earning income 
subject to different statutory requirements. At most, it could be taken into account 
that, in the present case, there are very specific provisions for the taxation of fund 
income under the law on investment funds. 
22 If the Court of Justice were to take the view that, due to its non-specific purpose, 
the supervision of compliance with legal provisions of the management of a 
special investment fund is not specific to the management of a special investment 
fund, the same could hold true of activities which, according to their legal bases, 
are aimed at ensuring that unit-holders are taxed in accordance with the law. The 
question therefore arises as to whether an activity which seeks to ensure taxation 
of the income of unit-holders in accordance with the law is specific to the 
management of a special investment fund. 
Assessment of the intrinsic connection 
23 The Abbey National judgment also concerned various management and 
accounting services provided by a third-party manager. The United Kingdom 
Government and the Commission argued in favour of a narrow interpretation of 
the provision to the effect that only management activities intrinsically connected 
to portfolio management, and therefore having a direct impact on the existence of 
the assets and liabilities of the fund, could be exempted (narrow interpretation of 
the concept of management activity). 
K 
 
9 
24 The Court of Justice did not agree with this view: the administrative activities 
referred to in Annex II to the UCITS Directive may, in addition to straight 
portfolio management, also be exempt given that they are specific to the activities 
of a UCITS (Abbey National, paragraph 64). This is because that activity consists 
of the collective investment in transferable securities of capital raised from the 
public. However, according to the referring court, it must be inferred from the 
caveat added by the Court of Justice in paragraph 70 that the activities referred to 
in Annex II to the UCITS Directive are in any event specific to the management 
of a special investment fund and also exempt if they are carried out by the KAG 
itself. However, according to paragraph 70, those activities, when performed by a 
third-party manager, can be classified as an exempt activity only if, viewed 
broadly, they form a distinct whole that is specific to, and essential for, the 
management of a special investment fund (see, to that effect, GfBk, paragraph 21). 
It is for the national court to decide whether that condition is satisfied 
(paragraph 73). The Court of Justice does not rule this out but does not answer in 
the affirmative either, with the result that the judgment in Abbey National leaves 
open the question whether the significant management activities provided in that 
case are specific to the management of special investment funds. 
25 Further conclusions might be drawn from GfBk. In paragraph 23 of its judgment, 
the Court of Justice held that an activity is exempt where it is intrinsically 
connected to the activity characteristic of an IMC so that it has the effect of 
performing the specific and essential functions of management of a special 
investment fund. If, following those arguments, one might still consider that the 
determination of the income of holders of a unit in a fund constitutes an activity 
that is innate and typical of an investment fund, this may have to be limited in 
accordance with the following paragraph 24. In paragraph 24, the Court of Justice 
stated that activities consisting in giving recommendations to an IMC to purchase 
and sell assets are intrinsically connected to the activity characteristic of the IMC, 
which consists in the collective investment in transferable securities of capital 
raised from the public. 
26 The Court does not again refer to the administrative activities as listed in Annex II 
to the UCITS Directive, which are also mentioned in paragraph 22 as being 
specific. This may be because GfBk concerned advisory services with an intrinsic 
connection to portfolio management stricto sensu, and the Court of Justice 
therefore only referred to that. However, the fact remains that, in particular the 
Advocate General’s observations, to which the Court of Justice expressly refers, 
tend to indicate that, in principle, only straight portfolio management and 
administrative activities that have an intrinsic connection to it and which 
distinguishes them from other economic activities would be specific. Thus, not 
every administrative activity referred to in Annex II to the UCITS Directive would 
be inherently specific but, in the event of outsourcing to a third-party manager, the 
latter must also be intrinsically connected to portfolio management stricto sensu 
(modified narrow approach). 
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27 This modified narrow approach would also be consistent with the repeated 
observations of the Court according to which, in any event, the activities listed in 
Annex II to the UCITS Directive are specific to the management of IMCs if they 
exercise them themselves. If, however, they are provided by a third-party manager 
they must, viewed broadly, form a distinct whole and be specific to, and essential 
for, the management of special investment funds in order to come within the 
exemption. 
28 It might be inferred from the Court’s decision, according to which it is necessary 
to examine the extent of liability and the purpose of the activity in question in 
order to establish the specific nature of an outsourced activity listed in Annex II to 
the UCITS Directive, that the circular reasoning — i.e. that the activities listed in 
Annex II to the UCITS Directive are specific to the management of special 
investment funds even in cases of outsourcing, and that those activities therefore 
serve a specific purpose and also involve liability for a specific activity — is 
impermissible. To accept that circular reasoning would render pointless the 
guidance provided by the Court that, in the event that such activities are 
outsourced to a third party, the exemption applies only if it is specific, essential 
and forms a distinct whole. The question whether an activity listed in Annex II to 
the UCITS Directive is specific to the management of special investment funds if 
it is carried out by a third-party manager therefore depends on different criteria. 
According to the Court of Justice in GfBk, such a criterion is likely to be the 
existence of an intrinsic connection to the principal activity of portfolio 
management. 
29 This approach may, however, be at odds with the aforementioned broad approach. 
An argument against the narrow approach, according to which an activity is 
specific to the management of special investment funds only if it concerns the 
principal activity of an IMC and thus has an impact on the financial situation of 
the fund, are the foregoing remarks, according to which the Court of Justice did 
not accept the argument of the Commission and the United Kingdom as well as 
the robust rejection of this argument (ATP PensionService, paragraph 69). This 
leaves the modified narrow approach, according to which an administrative 
activity referred to in Annex II to the UCITS Directive is specific if, although it 
does not impact on the financial situation of the fund, it has an intrinsic 
connection to the portfolio management which determines the fund’s financial 
situation. If the latter approach, which may have been expressed in GfBk, were 
correct, the activities at issue in the present case cannot be exempted given the 
absence of an intrinsic connection to the IMC’s principal activity. 
Question of liability 
30 Regarding the relevance of liability, in paragraph 40 (second and third sentences) 
of Bookit and paragraph 36 of DPAS the Court of Justice states: in that regard, a 
service exempted under the VAT Directive must be distinguished from the supply 
of a mere physical or technical service. To that end, it is relevant to examine, in 
particular, the extent of the liability of the supplier of services, in particular the 
K 
 
11 
question whether that liability is restricted to technical aspects or whether it 
extends to the specific, essential aspects of the transactions which are 
characteristic of such transactions. 
31 If the determination of the relevant figures for the purpose of ensuring the taxation 
of unit-holders in accordance with provisions under the law on investment funds is 
specific and essential for the management of a special investment fund, K is also 
liable for those specific and essential functions. 
32 In the event of negative consequences for the unit-holder in the event that the 
figures in question are calculated incorrectly, the IMC would initially be liable for 
any damage suffered by the unit-holder. The IMC could, in turn, have recourse 
against K in accordance with the general principles of civil law. That does not, 
however, answer the question whether that liability extends to the specific, 
essential functions of those transactions which are characteristic for the 
transactions of an IMC. If only activities of portfolio management stricto sensu or 
only management activities with an intrinsic connection to straight portfolio 
management stricto sensu are specific, K would not be liable in relation to the 
activity to be assessed in this case. 
Regarding the required distinctiveness 
33 According to paragraphs 27 and 28 of GfBk, it is irrelevant whether an outsourced 
management activity that is intrinsically connected to portfolio management only 
forms the basis for the final decision of the IMC. The Court of Justice also 
reiterated the statement that the management of special investment funds may be 
divided into various activities, which may then benefit from the exemption. Where 
such activities are transferred to a third-party manager this applies provided that 
each of those services fulfils the specific, essential functions of the management 
of special investment funds by investment management companies.  
34 Consequently, K also considers that the required distinctiveness did not mean that 
the services had to form a whole package, but that it was sufficient that the 
outsourced management activity was sufficiently distinguishable. According to K 
this was the case since, as part of the overall determination of income, K performs 
the distinguishable activities of adjusting the figures received from the depositary 
bank in accordance with requirements under tax law. Furthermore, according to K 
the failure to mention the criterion of distinctiveness in GfBk meant that the Court 
may have abandoned that criterion or, at the very least, no longer attached the 
same significance to it as in earlier judgments. 
35 According to the referring court, it is very clear from the general remarks made in 
the Court’s judgments on the outsourcing of financial services which were handed 
down after GfBk (Bookit, DPAS, Fiscale Eenheid, Cardpoint) that the Court of 
Justice continues to rely on the ‘viewed broadly, form a distinct whole’ criterion 
for purposes of applying the exemption to an outsourced financial service. 
According to paragraphs 38 to 41 of Bookit, paragraph 34 of GfBk and 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-58/20 
 
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paragraph 71 of Fiscale Eenheid, the functional aspects of the activity are 
decisive. In order to be classified as a transaction for the management of a special 
investment fund a service must, viewed broadly, form a distinct whole which 
fulfils the specific, essential functions of the management of a special investment 
fund. 
36 However, the referring court is unclear on how far the distinctiveness of an 
outsourced management activity has to go or how extensive it has to be in order 
for it, ‘viewed broadly, [to] form a distinct whole’. The question that arises is 
therefore whether the service element provided by K and described in the 
summary of the facts, namely ‘taking on the tax-related responsibilities to ensure 
that the policy-holders are taxed’ by adapting the figures received from the 
depositary bank and/or the IMC, as described above, satisfies the requirement of 
the existence of a distinct whole when viewed broadly, as stipulated by the Court 
of Justice. 
37 An answer to the questions regarding the interpretation of Article 135(1)(g) of 
Directive 2006/112/EC, in particular the scope of the term ‘management of a 
special investment fund’, is relevant to the resolution of the pending dispute as 
regards the question of whether the outsourced determination of the taxable 
figures is treated as exempt from tax or as taxable. The Bundesfinanzgericht 
(Federal Finance Court) does not take the view that no doubts remain regarding 
the interpretation of EU law in the present case, particularly in view of the facts 
described above, which have been analysed above and which deviate from 
previous decided cases. Furthermore, in the interests of neutral competition within 
the European Union, there is an interest in the speedy clarification of the 
interpretation of the relevant provision of Directive 2006/112/EC.