VAT: an asset or a liability?

These are unsettling times for investment funds, pension funds, other institutional investors and their asset managers, custodians and brokers. The financial crisis has had a considerable impact on this sector, as have the various legislative developments that have taken place. The AIFMD, UCITS VI, MiFID, EMIR, Solvency II, CRD IV (Basel III) and the amendments to the Financial Supervision Act have resulted in changes to business and revenue models. The financial crisis has also changed the public’s perception of what is considered socially responsible from a tax perspective. All these developments impact the VAT position of investment funds, pension funds, other institutional investors, their asset managers, custodians and brokers.

The advisors of Meijburg & Co’s Indirect Tax Financial Services group have extensive experience not only in identifying the VAT risks confronting institutional investors and their asset managers, custodians, brokers and advisors, but also the VAT opportunities available to them. Recurring issues are:

  • the application of VAT exemptions to the services provided by asset managers, custodians and brokers;
  • the application of VAT exemptions to the acquisition of goods and services;
  • the right to recover VAT, including determining the pro rata recovery right;
  • using contractual clauses and general terms and conditions as a way to cover VAT risks;
  • setting up VAT efficient outsourcing procedures;
  • introducing VAT control measures and setting up VAT systems and processes;
  • the sale and purchase of business activities and their impact on VAT;
  • intra-group transactions and their impact on VAT.

 The Indirect Tax Financial Services Group is well aware of the challenges facing this sector and their impact on VAT and would be pleased to help you examine how these issues relate to your specific situation. If you would like more information on the VAT position of financial institutions in general, please click here to download our fact sheet ‘VAT in the financial sector’. If you would like more information on the VAT position of institutional investors and their asset managers, custodians and brokers, please click here to download our fact sheet on ‘VAT and asset managers, custodians and brokers’.

If you would like to read more about our general services provided to asset managers, please click here.