Wheels Common Investment Fund Trustees Ltd and Others v Commissioners for Her Majesty’s Revenue and Customs.
Date: 2013-03-07
16. It is to be noted at the outset that, according to settled case-law, whilst the exemptions provided for, inter alia, in Article 13B(d)(6) of the Sixth Directive and Article 135(1)(g) of Directive 2006/112 are independent concepts of European Union law which must, in principle, be given a common definition whose purpose is to avoid divergences in the application of the VAT system from one Member State to another, so that the Member States cannot alter their content, that is not however the case where the legislature has conferred on the Member States the task of defining certain terms of an exemption (see, to this effect, Case C-169/04 Abbey National  [2006] ECR I‑4027, paragraphs 38 and 39, and Claverhouse , paragraphs 19 and 20). The aforesaid provisions confer upon the Member States the task of defining the meaning of ‘special investment funds’ (see, to this effect, Abbey National , paragraphs 40 and 41, and Claverhouse , paragraph 43).
17. The power to define thereby accorded to the Member States is, however, limited by the prohibition on undermining the very terms of the exemption that are employed by the European Union legislature (see Claverhouse , paragraph 21). A Member State cannot in particular, without negating the very terms ‘special investment funds’, select from among special investment funds those which are eligible for the exemption and those which are not. Those provisions thus grant it only the power to define, in its domestic law, the funds which meet the definition of ‘special investment funds’ (see Claverhouse , paragraphs 41 to 43).
18. The power accorded to the Member States to define the meaning of ‘special investment funds’ must also be exercised in compliance with the objectives pursued by the Sixth Directive and Directive 2006/112 and with the principle of fiscal neutrality inherent in the common system of VAT (see Claverhouse , paragraphs 22 and 43).
19. In that regard it must be observed, first, that the purpose of the exemption of transactions connected with the management of special investment funds is, particularly, to facilitate investment in securities by means of investment undertakings by excluding the cost of VAT and, in that way, ensuring that the common system of VAT is neutral as regards the choice between direct investment in securities and investment through collective investment undertakings (see Abbey National , paragraph 62, and Claverhouse , paragraph 45).
20. Second, the principle of fiscal neutrality precludes economic operators carrying out the same transactions from being treated differently in relation to the levying of VAT (see, to this effect, Case C-382/02 Cimber Air  [2004] ECR I-8379, paragraphs 23 and 24; Case C-280/04 Jyske Finans  [2005] ECR I-10683, paragraph 39; Abbey National , paragraph 56; and Claverhouse , paragraph 29).
21. It should also be noted that this principle does not require the transactions to be identical. According to settled case-law the principle also precludes treating similar supplies of services, which are thus in competition with each other, differently for VAT purposes (see, inter alia, Case C-109/02 Commission  v Germany  [2003] ECR I-12691, paragraph 20; Joined Cases C-453/02 and C‑462/02 Linneweber and Akritidis  [2005] ECR I-1131, paragraph 24; Case C‑498/03 Kingscrest, Associates and Montecello  [2005] ECR I-4427, paragraph 54; Case C-106/05 L.u.p. [2006] ECR I-5123, paragraph 32; Case C-246/04 Turn- und Sportunion Waldburg [2006] ECR I-589, paragraph 33; Joined Cases C‑443/04 and C-444/04 Solleveld and van den Hout-van Eijnsbergen  [2006] ECR I‑3617, paragraph 39; and Claverhouse , paragraph 46).
23. Funds which constitute undertakings for collective investment in transferable securities within the meaning of the UCITS Directive are special investment funds (see, to this effect, inter alia Case C-44/11 Deutsche Bank  [2012] ECR I-0000, paragraph 32). As is clear from Article 1(2) of that directive, undertakings for collective investment in transferable securities are undertakings which, such as AUTs and OEICs (see, to this effect, Claverhouse , paragraph 50), have as their sole object, in accordance with the objective pursued by the exemption provided for in Article 13B(d)(6) of the Sixth Directive and Article 135(1)(g) of Directive 2006/112, the collective investment in transferable securities of capital raised from the public.
24. Furthermore, funds which, without being collective investment undertakings within the meaning of the UCITS Directive, display characteristics identical to theirs and thus carry out the same transactions or, at least, display features that are sufficiently comparable for them to be in competition with such undertakings must also be regarded as special investment funds (see, to this effect, Abbey National , paragraphs 53 to 56, and Claverhouse , paragraphs 48 to 51).
27. In particular, the members of a retirement pension scheme such as that at issue in the main proceedings do not bear the risk arising from the management of the investment fund in which the scheme’s assets are pooled, unlike private investors with assets in a collective investment undertaking (see, to this effect, Claverhouse , paragraph 50). Whilst the pension that may be received by an employee who is a member of a retirement pension scheme such as that at issue in the main proceedings does not depend at all on the value of the scheme’s assets and the performance of the investments made by the scheme’s managers, but is defined in advance on the basis of length of service with the employer and of the amount of the salary, the return that can be hoped for by persons who purchase units in a collective investment undertaking depends on the performance of the investments made by the fund’s managers over the period for which those persons hold the units.