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Decision issued by the Belgian VAT authorities about the Deutsche Bank case (C-44/11)

The ECJ decided in July 2012 that discretionary portfolio management services represent one single taxable supply for VAT purposes. According to the ECJ, the portfolio management service consists basically of two elements of which it is not possible to regard one element as constituting a principal service and the other as an ancillary service. Since the VAT exemptions are to be interpreted strictly, portfolio management services cannot be exempt as transactions in securities (for more details see our e-tax flashes dated June and July 2012).

As expected, the Belgian VAT authorities have upheld the full application of DB case in Belgium. This confirmation is not surprising since most of the taxpayers have already applied VAT on discretionary portfolio management services in Belgium based on the last position taken by the Ministry of Finance.

In addition to the pure discretionary portfolio management services, the Belgian VAT authorities also stress that VAT should be applied on investment advice services. Those services consist of providing personalized investment advices to clients with regard to one or several financial transactions while the client remains free to decide whether he will purchase/sell securities.

However, in cases where the client actually decides to purchase/sell securities based on investment advice, those transactions remain VAT exempt as other transactions on securities.

Therefore, where the supplier requests one single price for both investment advice services and the subsequent purchase/sale of securities services, the price has to be split in order for investment advice services to be identified and subject to VAT.

Since the decision will take effect from July 1, 2015, taxpayers will also have to assess the impact for their past transactions.

*Decision no. E.T.124.567 dd. 10 April 2015.


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Jos Goubert

Tax Knowledge Dept.

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