K and DBKAG

In the joined cases of K (Case C-58/20) and DBKAG (Case C-59/20) (17 June 2021) the CJEU held that the VAT exemption for the management of special investment funds (SIFs) could in principle extend to both managing the tax-related responsibilities of SIFs and a licence to use specialised risk management and performance measurement software.

The two cases varied in their specifics. In K various management companies had outsourced services to K for the calculation of the taxable income of unit holders from the funds. In DBKAG the taxpayer (which managed special investment funds) was granted a right by a company to use software described as essential to risk management and performance measurement. Whilst the specific differed in both cases the taxpayers argued that the services in question were covered by the exemption in Directive 2006/112/EC article 135(1)(g). This required EU member states to exempt ‘the management...