Abbey wins major tax battle
Outsourced fund management administration services exempt from VAT, ECJ rules
A major threat to the outsourcing industry was removed yesterday when the
courts ruled in favour of Abbey National and Inscape over VAT exemption for
The battle to win the VAT exemption in the European Court of Justice opens up
the potential for growth of outsourced administration services for the funds
‘A serious fiscal obstacle to efficient outsourcing will be removed and this
will further open Europe up as a market for the funds industry,’ said Peter
Mason from CMS Cameron McKenna, who acted on behalf of Abbey.
‘This will affect both UK and overseas businesses involved in the funds
industry, and they will need to look carefully at what the implications of this
outcome are for them and to what extent they, or their service providers, may be
entitled to VAT exemptions,’ he added.
The court also ruled that depository services were not exempt from VAT.