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Financial Investments: European Union

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VAT and Financial Services

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Abstract

The EU VAT treatment of financial investments is complex. The general approach under the VAT Directive is an exemption without credit, regarding both financial transactions as such and ancillary services. However, to a considerable degree financial investments remain outside the scope of VAT, whereas a few related services are actually taxed. Moreover, the implications of both out-of-scope and exempt investments, for the input VAT deduction are not straightforward, but vary according to the type of investment and its nexus with other taxable business activities. EU legislation provides little guidance regarding the detailed VAT consequences, and the 2007 reform proposal of the EU Commission which sought to provide greater legal certainty has recently been withdrawn. The European Court of Justice has filled some gaps—not always convincingly—but several grey areas remain, especially with respect to investments in derivatives. Not surprisingly, national approaches towards the taxation of financial investments vary considerably within the Union.

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Notes

  1. 1.

    Directive 2006/112/EC of 28 November 2006 on the common system of value added tax [hereinafter VAT Directive].

  2. 2.

    Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes.

  3. 3.

    See the Commission proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance and financial services, COM (2007) 747 Final/2, 20 February 2008 [hereinafter Proposal for a Council Directive]; Commission proposal for a Council Regulation laying down implementing measures for Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance and financial services, COM (2007) 746 Final/2 [hereinafter Proposal for a Council Regulation]; and Commission Background Paper on the harmonisation of turnover taxes: Financial and Insurance Services, 5 March 2008. TAXUD/2414/08 [hereinafter Commission Background Paper]. In April 2016, the Commission has withdrawn its proposals, see OJ C 155 of 30 April 2016, p. 3. The Commission has informally announced to launch a new proposal in the foreseeable future, but it has not as yet proceeded to do so.

  4. 4.

    Cf. Opinion of Advocate General Sharpston, 8 May 2012, case C-44/11, Deutsche Bank, EU:C:2012:276, para. 53; AG Kokott, 24 October 2013, case C-461/12, Granton Advertising, EU:C:2013:700, paras. 29–33.

  5. 5.

    CJEU 12 June 2014, case C-461/12, Granton Advertising, EU:C:2014:1745, para. 30. For an alternative view, see Englisch (2013, pp. 75 et seq.).

  6. 6.

    This conversion of the exemption into a zero-rating regime in third country scenarios is intended to preserve the international competitiveness of the European financial sector. For further details and references, see the corresponding remarks in Joachim Englisch, Loan Intermediary Services: European Union, this volume.

  7. 7.

    See CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, paras. 51–52.

  8. 8.

    Council Regulation (EC) No 1777/2005 of 17 October 2005 laying down implementing measures for Directive 77/388/EEC on the common system of value added tax [hereinafter VAT Implementing Regulation, as amended].

  9. 9.

    See CJEU 12 June 2014, case C-461/12, Granton Advertising, EU:C:2014:1745, para. 27. The expression used in the French version (French being the working language of the Court) is ‘un droit de propriété’, which has been translated into English somewhat imprecisely as ‘property right’. But see also para. 31 of the English version: ‘right of ownership’.

  10. 10.

    See also the Commission Background Paper, p. 31.

  11. 11.

    For an extensive analysis, see Herbain (2015).

  12. 12.

    See also the Commission Background Paper, p. 31.

  13. 13.

    Directive 2004/39/EC of 21 April 2004 on markets in financial instruments; to be replaced on 3 January 2017 by Directive 2014/65/EU of 15 May 2014 on markets in financial instruments (recast), which provides for an identical definition in its Art. 4(1)(44)(a).

  14. 14.

    CJEU 12 June 2014, case C-461/12, Granton Advertising, EU:C:2014:1745, para. 27 (emphasis added).

  15. 15.

    See the Proposal for a Council Directive, in which the Commission proposes a new Art. 135a pursuant to which the ‘supply of securities’ means the supply of tradable instruments.

  16. 16.

    CJEU 10 March 2011, case C-540/09, SEB, EU:C:2011:137, para. 30.

  17. 17.

    See CJEU 5 June 1997, C-2/95, SDC, EU:C:1997:278, para. 72.

  18. 18.

    See Council Presidency Note, doc 14964/11 FISC 122, 30 September 2011, p. 5.

  19. 19.

    See Council Presidency Note, doc 14965/11 FISC 123, 30 September 2011, pp. 13–14.

  20. 20.

    See the Proposal for a Council Directive, Art. 135a(8)(a).

  21. 21.

    See CJEU 26 June 2003, case C-442/01, KapHag Renditefonds, EU:C:2003:381, para. 41.

  22. 22.

    See CJEU 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, paras. 24–25.

  23. 23.

    See CJEU 13 March 2008, case C-437/06, Securenta, EU:C:2008:166, paras. 27–28.

  24. 24.

    CJEU 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, para. 26.

  25. 25.

    See Heber (2013).

  26. 26.

    Cf. CJEU 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, para. 36. In this judgment, the Court still established a direct link of the overheads to the whole ‘economic activity’ of the taxable person, which in the EU VAT system is a synonym for taxable activities that fall within the scope of VAT. However, the Court subsequently qualified in its judgment of CJEU 13 March 2008, case C-437/06, Securenta, EU:C:2008:166, paras. 28–30, that the deemed overheads incurred within the framework of the issue of an equity instrument relate to the entire business activity, including out-of-scope activities.

  27. 27.

    Cf. CJEU 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, para. 37.

  28. 28.

    Cf. CJEU 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, para. 37; 13 March 2008, case C-437/06, Securenta, EU:C:2008:166, paras. 31 et seq. See also CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 72.

  29. 29.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665.

  30. 30.

    See CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 28, with references to CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 59; 8 February 2007, case C-435/05, Investrand, EU:C:2007:87, para. 25; and the case law there cited.

  31. 31.

    CJEU 20 June 1991, case C-60/90, Polysar, EU:C:1991:268, para. 13.

  32. 32.

    This position was formulated for the first time in CJEU 20 June 1996, case C-155/94, Wellcome Trust, EU:C:1996:243, para. 33. See furthermore, e.g., CJEU 26 June 2003, case C-442/01, KapHag Renditefonds, EU:C:2003:381, para. 40; 21 October 2004, case C-8/03, BBL, EU:C:2004:650, para. 38; 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 57; 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, para. 19.

  33. 33.

    See CJEU 20 June 1996, case C-155/94, Wellcome Trust, EU:C:1996:243, para. 37; 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 61.

  34. 34.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 30, with references to CJEU 20 June 1991, case C-60/90, Polysar, EU:C:1991:268, para. 14; 14 November 2000, case C-142/99, Floridienne and Berginvest, EU:C:2000:623 paras. 18–19; 12 July 2001, case C-102/00, Welthgrove, EU:C:2001:416, paras. 15–16; 27 September 2001, case C-16/00, Cibo Participations, EU:C:2001:495, paras. 20–21; 26 June 2003, C-305/01, MKG-Kraftfahrzeuge-Factoring, EU:C:2003:377, para. 46. This has furthermore been confirmed in, e.g., CJEU 6 September 2012, case C-496/11, Portugal Telecom, EU:C:2012:557, paras. 33–34; 16 July 2015, joined cases C-108/14 and C-109/14, Larentia + Minerva, EU:C:2015:496, paras. 20–21, with further references.

  35. 35.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 34.

  36. 36.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 31; see also CJEU 20 June 1996, case C-155/94, Wellcome Trust, EU:C:1996:243, para. 35; 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 59; 21 October 2004, case C-8/03, BBL, EU:C:2004:650, para. 41; 26 May 2005, case C-465/03, Kretztechnik, EU:C:2005:320, para. 20.

  37. 37.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 31.

  38. 38.

    Pure holding companies that do not carry out any supplies of goods or services for consideration, either for their subsidiaries or for third parties, have been consistently treated like a private investor by the Court and have been denied the status of a taxable person, which in the EU VAT system implies that they are not entitled to any input VAT deduction; see, for instance, CJEU 20 June 1991, case C-60/90, Polysar, EU:C:1991:268; 14 November 2000, case C-142/99, Floridienne and Berginvest, EU:C:2000:623; 12 July 2001, case C-102/00, Welthgrove, EU:C:2001:416; 27 September 2001, case C-16/00, Cibo Participations, EU:C:2001:495.

  39. 39.

    See CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 33.

  40. 40.

    See CJEU 22 February 2001, case C-408/98, Abbey National, EU:C:2001:110, para. 30; 27 November 2003, case C-497/01, Zita Modes, EU:C:2003:644, para. 29; 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 36.

  41. 41.

    For further details, see IBFD (2014, pp. 567–568).

  42. 42.

    See CJEU 22 February 2001, case C-408/98, Abbey National, EU:C:2001:110, paras. 24 et seq. For a detailed analysis, see Englisch (2012, p. 580 et seq.).

  43. 43.

    See CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, paras. 38 and 40.

  44. 44.

    CJEU 30 May 2013, case C-651/11, X BV, EU:C:2013:346, para. 38.

  45. 45.

    See CJEU 30 May 2013, case C-651/11, X BV, EU:C:2013:346, paras. 52–53.

  46. 46.

    For a critical analysis, see Englisch (2012, § 17 para. 181).

  47. 47.

    See CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, paras. 44 et seq.

  48. 48.

    See CJEU 5 July 2012, case C-259/11, DTZ Zadelhoff, EU:C:2012:423, paras. 36–39; 20 March 2014, case C-139/12, Caixa d’Estalvis i Pensions de Barcelona, EU:C:2014:174, Rz. 35; 12 June 2014, case C-461/12, Granton Advertising, EU:C:2014:1745, para. 28.

  49. 49.

    See IBFD (2014, pp. 636 et seq.). For further details, see Commission Impact Assessment accompanying the document Proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC, 28 September 2011, SEC(2011) 1102 final, Vol. 4, pp. 32 et seq.

  50. 50.

    See Proposal for a Council Directive, p. 3. For further explanations, see Commission Background Paper, pp. 9 et seq.

  51. 51.

    See AG Jacobs 13 April 2000, case C-408/98, Abbey National, EU:C:2000:207, para. 35.

  52. 52.

    See CJEU 8 June 2000, case C-98/98, Midland Bank, EU:C:2000:300, para. 20.

  53. 53.

    See CJEU 6 April 1995, case C-4/94, BLP Group, EU:C:1995:107, paras. 25 et seq.

  54. 54.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, paras. 65–66.

  55. 55.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, paras. 62 and 71; CJEU 30 May 2013, case C-651/11, X BV, EU:C:2013:346, para. 56.

  56. 56.

    In Germany, the federal supreme tax court (Bundesfinanzhof) has ignored the new AB SKF approach and claims the CJEU still upholds the BLP standards; in the UK, the First Tier Tribunal has interpreted the Court’s approach very restrictively; whereas in France, the supreme administrative court (Conseil d’Etat) has applied the criteria in a manner that will usually lead to an input VAT deduction. See Bundesfinanzhof 9 February 2012, case V R 40/10, BFH/NV 2012, 681; First Tier Tribunal 3 September 2013, [2013] UKFTT 467 (TC), paras. 143 et seq.; Conseil d’Etat 23 December 2010, case 324181.

  57. 57.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 66.

  58. 58.

    See CJEU 13 March 2008, case C-437/06, Securenta, EU:C:2008:166, paras. 26 et seq.

  59. 59.

    See CJEU 12 February 2009, case C-517/07, VNLTO, EU:C:2009:88, paras. 35 et seq. The above interpretation of the case law is furthermore shared by AG Kokott in her Opinion of 22 April 2015, case C-126/14, Sveda, EU:C:2015:254, para. 52; her conclusions have been endorsed by the Court, see CJEU 22 October 2015, case C-126/14, Sveda, EU:C:2015:712, paras. 26 et seq.

  60. 60.

    CJEU 29 October 2009, case C-29/08, AB SKF, EU:C:2009:665, para. 72.

  61. 61.

    See CJEU 16 July 2015, joined cases C-108/14 and C-109/14, Larentia + Minerva, EU:C:2015:496, para. 25 (emphasis added); see also AG Mengozzi 26 March 2015, joined cases C-108/14 and C-109/14, Larentia + Minerva, EU:C:2015:212, paras. 35–39, with further references.

  62. 62.

    CJEU 5 June 1997, case C-2/95, SDC, EU:C:1997:278, paras. 72–73; 13 December 2001, case C-235/00, CSC Financial Services, EU:C:2001:696, para. 28; 10 March 2011, case C-540/09, SEB, EU:C:2011:137, para. 30.

  63. 63.

    CJEU 13 December 2001, case C-235/00, CSC Financial Services, EU:C:2001:696, para. 33; 10 March 2011, case C-540/09, SEB, EU:C:2011:137, para. 31.

  64. 64.

    See CJEU 10 March 2011, case C-540/09, SEB, EU:C:2011:137, para. 32.

  65. 65.

    See CJEU 10 March 2011, case C-540/09, SEB, EU:C:2011:137, paras. 30–33.

  66. 66.

    See Proposal for a Council Directive, Art. 135a(4).

  67. 67.

    See Proposal for a Council Regulation, Art. 5(1).

  68. 68.

    See Henkow (2008, p. 35).

  69. 69.

    See CJEU 12 June 2014, C-461/12, Granton Advertising, EU:C:2014:1745, para. 27. See also AG Kokott 24 October 2013, C-461/12, Granton Advertising, EU:C:2013:700, para. 22.

  70. 70.

    Cf. CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 69: bank deposits are to be distinguished from placements in securities.

  71. 71.

    See the Proposal for a Council Directive, where the Commission proposes a new Art. 135a pursuant to which the ‘supply of securities’ means the supply of tradable instruments.

  72. 72.

    See CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, paras. 69 and 71.

  73. 73.

    This can also be inferred from CJEU 6 February 1997, case C-80/95, Harnas and Helm, EU:C:1997:56, paras. 18–19.

  74. 74.

    See Proposal for a Council Directive, Art. 135a(8)(b). More specifically, Art. 9(2) of the proposed Council Implementing Regulation mentions ‘debentures, bonds and corporate bonds, promissory notes, euro debt securities and other tradable commercial papers’. Arguably, promissory notes are currently covered by the exemption for transactions in ‘negotiable instruments’ laid down in Art. 135(1)(d) of the VAT Directive.

  75. 75.

    See Proposal for a Council Regulation, Art. 9(3), which refers to ‘hybrid securities, including preference shares, equity warrants, convertible instruments in the form of bonds or preferred stock which may be converted into the common stock of the issuing company’.

  76. 76.

    See CJEU 6 April 1995, case C-4/94, BLP Group, EU:C:1995:107, para. 25.

  77. 77.

    Likewise Henkow (2008, p. 177).

  78. 78.

    See Bundesfinanzhof 6 May 2010, case V R 29/09, BStBl. II 2010, 885.

  79. 79.

    Likewise Rüdiger Philipowski, in Rau and Dürrwächter, Kommentar zum Umsatzsteuergesetz (loose-leaf commentary), § 4 Nr. 8 paras. 357–358.

  80. 80.

    CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 69.

  81. 81.

    See in this regard, prior to the EDM judgment, especially CJEU 11 July 1996, C-306/94, Régie dauphinoise, EU:C:1996:290, para. 18; 26 June 2003, case C-305/01, MKG-Kraftfahrzeuge-Factoring, EU:C:2003:377, para. 46.

  82. 82.

    CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, paras. 67–68.

  83. 83.

    See CJEU 6 February 1997, case C-80/95, Harnas and Helm, EU:C:1997:56, paras. 18–19.

  84. 84.

    This was still acknowledged in CJEU 6 February 1997, case C-80/95, Harnas and Helm, EU:C:1997:56, para. 18.

  85. 85.

    See CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 71.

  86. 86.

    In the EDM case, the CJEU made no distinction in its treatment of both bank deposits and securitized debt instruments as securities that are exempt pursuant to what is now Art. 135(1)(f) of the VAT Directive; see CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 71. However, it is submitted here that this was likely a lack of reflection, since bank deposits cannot be regarded as ‘securities’ within the meaning of Art. 135(1)(f) and are indeed explicitly mentioned in Art. 135(1)(d) of the Directive.

  87. 87.

    See Art. 4(1), points (44)(c), 49, 50 of Directive 2014/65/EU, read together with Art. 2(1), points (29), (30) of Regulation (EU) No. 600/2014.

  88. 88.

    See, for instance, Henkow (2008, pp. 133 et seq.), Wäger (2012).

  89. 89.

    See Council Presidency Note, doc. 14964/11 FISC 122, 30 September 2011, p. 5.

  90. 90.

    Settled case law since CJEU 3 March 1994, case C-16/93, Tolsma, EU:C:1994:80, para. 14.

  91. 91.

    This is also true if the futures contract is created upon the exercise of an option. Therefore, the physical ‘delivery’ in case of the exercise of an option on futures does not constitute a taxable transaction.

  92. 92.

    For a different opinion, see Wäger (2012, p. 1836).

  93. 93.

    As regards the need to draw a clear delineation between betting services and financial services, see also CJEU 14 May 2008, joined cases C-231/07 and C-232/07, Tiercé Ladbroke and Derby, EU:C:2008:275.

  94. 94.

    See CJEU 14 July 1998, case C-172/96, First National Bank of Chicago, EU:C:1998:354, para. 25; 9 October 2001, case C-409/98, Mirror Group, EU:C:2001:524, para. 26. This author’s view is shared by Wäger (2012, p. 1835).

  95. 95.

    For a definition of a CDS, see Art. 2(1)(c) of Regulation (EU) No. 236/2012 of 14 March 2012, on short selling and certain aspects of credit default swaps: ‘“credit default swap” means a derivative contract in which one party pays a fee to another party in return for a payment or other benefit in the case of a credit event relating to a reference entity and of any other default, relating to that derivative contract, which has a similar economic effect’.

  96. 96.

    See AG Kokott 24 October 2013, C-461/12, Granton Advertising, EU:C:2013:700, paras. 23, 28, and 36.

  97. 97.

    See AG Kokott 24 October 2013, C-461/12, Granton Advertising, EU:C:2013:700, para. 23, referring to the predecessor Implementing Regulation (EC) No 1777/2005.

  98. 98.

    See AG Kokott 24 October 2013, C-461/12, Granton Advertising, EU:C:2013:700, para. 34, with further references.

  99. 99.

    See Proposal for a Council Regulation, Art. 20. See also Art. 13(2)(k) of this proposal, pursuant to which an option of receiving goods is explicitly disqualified from the exemption.

  100. 100.

    See Guidelines resulting from the 63rd meeting of 17 July 2001, TAXUD/2441/01, Sec. 4.1.

  101. 101.

    See Henkow (2008, pp. 133 et seq.).

  102. 102.

    See Council Presidency Note, doc. 14964/11 FISC 122, 30 September 2011, p. 5.

  103. 103.

    See Council Presidency Note, doc. 14965/11 FISC 123, 30 September 2011, p. 14.

  104. 104.

    CJEU 12 June 2014, C-461/12, Granton Advertising, EU:C:2014:1745, para. 27.

  105. 105.

    See CJEU 12 June 2014, C-461/12, Granton Advertising, EU:C:2014:1745, para. 31.

  106. 106.

    See CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 42, with further references; settled case law.

  107. 107.

    See Bundesfinanzhof 30 March 2006, case V R 19/02, BStBl II 2007, p. 68.

  108. 108.

    See Henkow (2008, pp. 133–135); Rüdiger Philipowski, in Rau and Dürrwächter, Kommentar zum Umsatzsteuergesetz, § 4 Nr. 8 paras. 191, 194 and 195.

  109. 109.

    See CJEU 12 June 2014, case C-461/12, Granton Advertising, EU:C:2014:1745, para. 37.

  110. 110.

    See AG Kokott 16 July 2015, case C-264/14, Hedqvist, EU:C:2015:498, para. 49.

  111. 111.

    CJEU 25 February 1999, case C-349/96, CPP, EU:C:1999:93, para. 22.

  112. 112.

    Cf. CJEU 25 February 1999, case C-349/96, CPP, EU:C:1999:93, para. 18; 8 March 2001, case C-240/99, Försäkringsaktiebolag Skandia, EU:C:2001:140, paras. 30 et seq.

  113. 113.

    This assumption is not called into question by the fact that, from the perspective of a taxable person who uses derivatives as risk management instruments, there may be a lesser degree of substitutability; see Moriarty, Phillips and Tosini (1981, pp. 61 et seq.); but see also Catlett and Boehlje (1982, p. 95 et seq.).

  114. 114.

    CJEU 10 November 2011, joined cases C-259/10 and C-260/10, The Rank Group, EU:C:2011:719, para. 36.

  115. 115.

    This has been acknowledged by the Court, too; see, for instance, CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 45.

  116. 116.

    See CJEU 19 April 2007, C-455/05, Velvet and Steel Immobilien, EU:C:2007:232, paras. 22–23.

  117. 117.

    See Switzer and Fan (2008, p. 33 et seq.).

  118. 118.

    See AG Jääskinen 16 December 2010, case C-540/09, Skandinaviska Enskilda Banken, EU:C:2010:788, para. 48.

  119. 119.

    For a different opinion, see Wäger (2012, p. 1838).

  120. 120.

    See CJEU 5 June 1997, case C-2/95, SDC, EU:C:1997:278, para. 66; 4 May 2006, case C-169/04, Abbey National, EU:C:2006:289, para. 71; 28 July 2011, case C-350/10, Nordea Pankki Suomi, EU:C:2011:532, para. 24.

  121. 121.

    See 13 December 2001, case C-235/00, CSC Financial Services, EU:C:2001:696, para. 335 July 2012, case C-259/11, DTZ Zadelhoff, EU:C:2012:423, para. 23; 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 37.

  122. 122.

    See, in this regard, also the compromise proposal in the Council Presidency Note, doc. 14965/11 FISC 123, 30 September 2011, p. 14.

  123. 123.

    See 13 March 2008, case C-437/06, Securenta, EU:C:2008:166, paras. 28–30.

  124. 124.

    CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243.

  125. 125.

    See CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 63.

  126. 126.

    CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, paras. 60 and 63.

  127. 127.

    See CJEU 21 October 2004, case C-8/03, BBL, EU:C:2004:650, paras. 41–43.

  128. 128.

    See also Annex I, Section III (c) of Directive 2014/65/EU of 15 May 2014 on markets in financial instruments (recast).

  129. 129.

    See CJEU 19 April 2007, C-455/05, Velvet and Steel Immobilien, EU:C:2007:232, paras. 22–23.

  130. 130.

    Directive 2009/65/EC of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (recast).

  131. 131.

    See, by analogy, CJEU 28 June 2007, C-363/05, JP Morgan Fleming Claverhouse Investment Trust, EU:C:2007:391, paras. 29–30.

  132. 132.

    See the Proposal for a Council Directive, Art. 135a(8)(c).

  133. 133.

    See the Proposal for a Council Regulation, Art. 9(4).

  134. 134.

    See Commission Background Paper, pp. 34–35.

  135. 135.

    See Council Presidency Note, doc. 14964/11 FISC 122, 30 September 2011, p. 5.

  136. 136.

    CJEU 4 May 2006, case C-169/04, Abbey National, EU:C:2006:289, para. 62; 28 June 2007, C-363/05, JP Morgan Fleming Claverhouse Investment Trust, EU:C:2007:391, para. 45; 7 March 2013, case C-424/11, Wheels Common Investment Fund Trustees, EU:C:2013:144, para. 19; 7 March 2013, case C-275/11, GfBk, EU:C:2013:141, para. 30.

  137. 137.

    See, in this regard, in particular the following two precedents of the CJEU: CJEU 4 May 2006, case C-169/04, Abbey National, EU:C:2006:289; 7 March 2013, case C-275/11, GfBk, EU:C:2013:141.

  138. 138.

    See, in this regard, CJEU 21 October 2004, case C-8/03, BBL, EU:C:2004:650, paras. 27 and 42.

  139. 139.

    VAT Committee, Guidelines resulting from the 17th meeting of 4–5 July 1984, XV/243/84 (1/3).

  140. 140.

    See CJEU 28 June 2007, C-363/05, JP Morgan Fleming Claverhouse Investment Trust, EU:C:2007:391, paras. 41–43; 7 March 2013, case C-424/11, Wheels Common Investment Fund Trustees, EU:C:2013:144, paras. 17–18.

  141. 141.

    See CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 33; 7 March 2013, case C-424/11, Wheels Common Investment Fund Trustees, EU:C:2013:144, para. 25.

  142. 142.

    See CJEU 28 June 2007, C-363/05, JP Morgan Fleming Claverhouse Investment Trust, EU:C:2007:391, paras. 29–35.

  143. 143.

    Likewise Rüdiger Philipowski, in Rau and Dürrwächter, Kommentar zum Umsatzsteuergesetz, § 4 Nr. 8 para. 234.

  144. 144.

    See, in particular, Bundesfinanzhof 11 October 2007, case V R 22/04, BStBl II 2008, 993.

  145. 145.

    See the Proposal for a Council Regulation, Art. 13(a).

  146. 146.

    See Commission Background Paper, p. 8.

  147. 147.

    See CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 27, with further references to the Court’s settled case law on composite supplies.

  148. 148.

    See CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, paras. 31–35.

  149. 149.

    See CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 44.

  150. 150.

    See CJEU 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, paras. 42–43.

  151. 151.

    See Council Presidency Note, doc. 14965/11 FISC 123, 30 September 2011.

  152. 152.

    This is at least the mainstream view of economists on the character of services that are ancillary to the acquisition of savings instruments; for a more in-depth discussion, see Grubert and Krever (2013, pp. 316–317), with further references.

  153. 153.

    See de la Feria and Krever (2013, p. 29).

  154. 154.

    See the Proposal for a Council Regulation, Art. 10(1).

  155. 155.

    See the Proposal for a Council Regulation, Art. 20(4).

  156. 156.

    See Commission Background Paper, p. 54: ‘We think that these elements reflect the specific and essential character of an exempt supply of a security. (Some lawyers in the Commission's Legal Service were sceptical about this approach.)’.

  157. 157.

    See (as cited at n. 121, above), 13 December 2001, case C-235/00, CSC Financial Services, EU:C:2001:696, para. 335; 5 July 2012, case C-259/11, DTZ Zadelhoff, EU:C:2012:423, para. 23; 19 July 2012, case C-44/11, Deutsche Bank, EU:C:2012:484, para. 37.

  158. 158.

    See CJEU 13 December 2001, case C-235/00, CSC Financial Services, EU:C:2001:696, para. 39; 21 June 2007, case C-453/05, Ludwig, EU:C:2007:369, para. 28.

  159. 159.

    See CJEU 29 April 2004, case C-77/01, EDM, EU:C:2004:243, para. 75. Arguably, the Court has thereby implicitly overruled its prior judgment, CJEU 11 July 1996, C-306/94, Régie dauphinoise, EU:C:1996:290, para. 22.

  160. 160.

    CJEU 13 March 2008, case C-437/06, Securenta, EU:C:2008:166, paras. 33 and 38; 6 September 2012, case C-496/11, Portugal Telecom, EU:C:2012:557, paras. 40 and 42; 16 July 2015, joined cases C-108/14 and C-109/14, Larentia + Minerva, EU:C:2015:496, paras. 27 and 30.

  161. 161.

    See Bundesfinanzhof 19 July 2011, case XI R 29/10, BFH/NV 2011, 2205 (2207).

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  1. Institute for Tax Law, Westfälische Wilhelms-Universität, Münster, Germany

    Joachim Englisch

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    Robert F. van Brederode

  2. Monash University , Melbourne, Victoria, Australia

    Richard Krever

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Englisch, J. (2017). Financial Investments: European Union. In: van Brederode, R., Krever, R. (eds) VAT and Financial Services. Springer, Singapore. https://doi.org/10.1007/978-981-10-3465-7_15

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