Pensions - Articles - ECJ say defined benefit schemes must continue to pay VAT

 Today the European Court of Justice (ECJ) has ruled against Wheels Common Investment Fund's attempt to secure VAT exemption for their defined benefit (DB) pension scheme.

 Wheels argued that their defined benefit scheme, which holds Ford Motor Company pensions, should be considered a Special Investment Fund under the EU VAT Directive and so management services provided to it should benefit from VAT exemption.* The ECJ has rejected this claim.

 Julie Patterson, IMA Director of Authorised Funds and Tax, said:

 "The Wheels case has highlighted the need for more clarity around what is considered a ‘Special Investment Fund'. Costly and lengthy legal cases are not in anyone's interests. A clearer definition of exactly where VAT should, and should not, apply in this area is needed in EU law. It is unfortunate that discussions on the Commission's proposals on the topic have stalled."