Article 135(1)(g) of the Principal VAT Directive (PVD) exempts the ‘management of special investment funds as defined by member states’. There is a lack of consistency at both national and EU levels as to how the exemption is interpreted and applied, leading to ongoing litigation. The Undertakings for Collective Investment in Transferable Securities (UCITS) Directive was introduced to harmonise the regulation of UCITS across the EU, leading to the question of whether a UCITS was by definition a special investment fund (SIF). In Claverhouse, it was ruled that the concept of a SIF went beyond UCITS, leading to a series of cases testing the extent of this judgment. In the most recent case, Fiscale Eenheid X, the investment fund was clearly not a UCITS as it invested in land, not securities, raising the question of whether it should nevertheless be a SIF by virtue of the principle of fiscal neutrality.
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