AEIP and PensionsEurope publish joint paper on VAT Directive

AEIP and Pensions Europe have published a joint position paper calling for political action to relieve pension fund participants from unnecessary VAT burden for contracted management services. The current interpretation of the VAT Directive leads to different treatment of pension plans for VAT purposes based on the form and the place of residence of the plan. In addition, the current regime provides insufficient guidance for hybrid pension plans (e.g. DB pension funds, where all or part of the risk is shifted from the employer to the fund itself or the employee) which are becoming more commonplace. This means that similar pension schemes in different countries face different tax treatments concerning the management services they procure.  PensionsEurope and AEIP therefore call for a review of the VAT Directive that exempts all pension funds from paying VAT on management services. The press release is available here.