Is Investment Advice Exempt From VAT?

Summary and implications

The Advocate General (AG) has opined in the case of GfBK Gesellschaft für Börsenkommunikation mBH v Finanzamt Bayreuth that investment advice provided to an investment fund constituted an activity of management and therefore benefitted from VAT exemption. The main points are as follows:

• An advisory service provided by a third party relating to the management of a fund constitutes an activity of management, if specific and distinct in nature.
• The principle of fiscal neutrality was not breached as it was not sufficiently engaged in this case.
• A strict interpretation of the definition of "management" would result in an increase to the final costs for investments.