Parties

In Case C-169/04,

REFERENCE for a preliminary ruling under Article 234 EC from the VAT and Duties Tribunal, London (United Kingdom), made by decision of 2 April 2004, received at the Court on 5 April 2004, in the proceedings

Abbey National plc,

Commissioners of Customs & Excise,

THE COURT (Third Chamber),

composed of A. Rosas, President of the Chamber, J. Malenovský, S. von Bahr (Rapporteur), A. Borg Barthet and U. Lõhmus, Judges,

Advocate General: J. Kokott,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 10 March 2005,

after considering the observations submitted on behalf of:

–Abbey National plc, by J. Woolf, Barrister, and J.-C. Bouchard, avocat, instructed by R. Croker, Solicitor,

–the United Kingdom Government, by K. Manji, E. O’Neill and S. Nwaokolo, acting as Agents, and by R. Hill, Barrister,

–the Luxembourg Government, by S. Schreiner, acting as Agent,

–the Commission of the European Communities, by R. Lyal, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 8 September 2005,

gives the following

1This reference for a preliminary ruling concerns the interpretation of Article 13B(d)(6) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’).

2The reference was made in the course of two sets of proceedings between Abbey National plc (‘Abbey National’) and Inscape Investment Fund, on the one hand, and the Commissioners of Customs & Excise (‘the Commissioners’), on the other, concerning the taxation of services supplied by the depositaries of a number of authorised unit trusts and of an open-ended investment company (‘OEIC’), and administration and accounting services performed by a third company delegated by the management company of an OEIC.

Legal context

Community legislation

Directive 2011/92

3Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

4Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

5Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

6Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

7Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

8Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

9Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

10Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

11Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

must be interpreted as meaning that where, in the context of a screening procedure carried out under that provision, a third party has provided the competent authority with objective evidence as regards the potential significant effects of that project on the environment, in particular on a species protected under Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora, as amended by Council Directive 2013/17/EU of 13 May 2013, that authority must ask the developer to provide it with additional information and take that information into account before deciding whether or not an environmental impact assessment is necessary for that project. However, where, despite the observations submitted to that authority by a third party, the competent authority is able to rule out, on the basis of objective evidence, the possibility that the project in question is likely to have significant effects on the environment, that authority may decide that an environmental impact assessment is not necessary, without being required to ask the developer to provide it with additional information.

Gratsias

Passer

Smulders

Delivered in open court in Luxembourg on 6 March 2025.

Registrar

President of the Chamber

ECLI:EU:C:2025:140

15

34. In those circumstances, the VAT and Duties Tribunal, London, decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1) Does the exemption for “management of special investment funds as defined by Member States”, contained in Article 13B(d)(6) of the Sixth VAT Directive, mean that the Member States have the power to define the activities comprising the “management” of the special investment funds, as well as the power to define the special investment funds which may benefit from the exemption?

(2) If the answer to Question 1 is no and the term “management” in Article 13B(d)(6) of the Sixth VAT Directive is to be given an independent Community law meaning, in the light of … Directive 85/611 …, are charges made by a depositary or trustee for the services it provides pursuant to Articles 7 and 14 of … Directive [85/611], national regulatory provisions and the relevant fund rules, exempt supplies of “management of special investment funds” under Article 13B(d)(6) of the Sixth VAT Directive?

(3) Again, if the answer to Question 1 is no and the term “management” is to be given an independent Community law meaning, does the exemption for the “management of special investment funds” in Article 13B(d)(6) of the Sixth VAT Directive apply to services performed by a third-party manager in respect of the administrative management of the funds?’

The first question

35. By its first question, the referring tribunal is asking, in essence, whether the concept of ‘management’ of special investment funds in Article 13B(d)(6) of the Sixth Directive has its own independent meaning in Community law whose content the Member States may not alter.

Observations submitted to the Court

36. Abbey National, the Luxembourg Government and the Commission of the European Communities submit that the exemption under Article 13B(d)(6) of the Sixth Directive for ‘the management of special investment funds as defined by Member States’ does not confer power on the latter to define the activities covered by the term ‘management’ of the funds.

37. On the other hand, the United Kingdom Government submits that that exemption confers that power on the Member States, as well as the power to define the special investment funds which may benefit from the exemption.

Findings of the Court

38. According to settled case-law, the exemptions provided for in Article 13 of the Sixth Directive have their own independent meaning in Community law which must be given a Community definition whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (see, particularly, Case C-358/97 Commission v Ireland [2000] ECR I-6301, paragraph 51; Case C‑428/02 Fonden Marselisborg Lystbådehavn [2005] ECR I-1527, paragraph 27; and Joined Cases C‑394/04 and C-395/04 Ygeia [2005] ECR I‑0000, paragraph 15).

39. While, consequently, the Member States may not alter their content, in particular in laying down conditions of application, that cannot however be so where the Council has specifically conferred on them the task of defining certain terms of an exemption (see Case C-468/93 Gemeente Emmen [1996] ECR I-1721, paragraph 25).

40. It is therefore appropriate to consider whether Article 13B(d)(6) of the Sixth Directive confers on the Member States the task of defining both the meaning of ‘special investment funds’ and that of ‘management’ of those funds or whether it covers only the first of those two concepts.

41. In that regard, it must be stated that while the English and Dutch versions of that provision are ambiguous as to its scope, it is clear, particularly from the Danish, German, French and Italian versions, that Article 13B(d)(6) of the Sixth Directive refers to the Member States’ definitions only as regards the meaning of ‘special investment funds’.

42. The limited scope of that reference to national law, as is clear particularly from the Danish, German, French and Italian versions, is supported by the context in which the expression occurs, by the scheme of the Sixth Directive and by the purpose of avoiding divergences in the application of the VAT system from one Member State to another.

43. Therefore, the reply to the first question must be that the concept of ‘management’ of special investment funds in Article 13B(d)(6) of the Sixth Directive has its own independent meaning in Community law whose content the Member States may not alter.

The second and third questions

44. By its second and third questions, which it is convenient to consider together, the referring tribunal is asking, in essence, whether Article 13B(d)(6) of the Sixth Directive is to be interpreted in such a way that the concept of ‘management of special investment funds’ does or does not cover:

– the services charged for by a depositary pursuant to Articles 7 and 14 of Directive 85/611, national regulatory provisions and the relevant fund rules; and

– the administrative and accounting management services of the funds performed by a third-party manager.

Observations submitted to the Court

45. Abbey National and the Luxembourg Government submit that charges made by a depositary or trustee for the services it supplies pursuant to Articles 7 and 14 of Directive 85/611, national regulatory provisions and the relevant fund rules are exempt supplies under Article 13B(d)(6) of the Sixth Directive.

46. The latter provision also covers the services performed by a third-party manager in respect of the administrative management of the funds.

47. The United Kingdom Government submits that the term ‘management’ of special investment funds in Article 13B(d)(6) of the Sixth Directive should be understood as referring to the core function of investment management performed by the manager of a special investment fund.

48. That exemption does not extend to the charges made by a depositary or trustee for the safe custody of the assets of the special investment fund or for supervising the manager’s activities to ensure that they are carried out in accordance with the law and fund rules.

49. For the same reasons, that exemption does not apply to the supply of purely administrative services to the manager by a subcontracted fund-accounting administrator.

50. The Commission submits that the expression ‘management of special investment funds’ within the meaning of Article 13B(d)(6) of the Sixth Directive covers all services which are closely linked to the operation of the fund, that is, to determining policies for investment and the acquisition and sale of shares.

51. The services supplied by a depositary pursuant to Articles 7 and 14 of Directive 85/611, national regulatory provisions and the fund rules do not constitute fund management for the purposes of Article 13B(d)(6) of the Sixth Directive.

52. Nor do the services performed by a third-party manager in respect of the administrative management of the funds constitute fund management for the purposes of that provision.

Findings of the Court

53. It must be noted, at the outset, that Article 13B(d)(6) of the Sixth Directive covers special investment funds whatever their legal form. Undertakings for collective investment constituted under the law of contract or trust law, and those constituted under statute both come within the scope of that provision.

54. Neither the context nor the wording of Article 13B(d)(6) of the Sixth Directive indicates that the legislature intended to limit the application of that provision only to undertakings for collective investment constituted under the law of contract or under trust law.

55. In fact, when the Sixth Directive was adopted, the Community terminology in this field was not yet harmonised, since Directive 85/611, Article 1(3) of which gives a Community definition of UCITS, was adopted only in 1985. In addition, while the French and Italian versions of Article 1(3) of Directive 85/611, when they designate undertakings for collective investment constituted under the law of contract, use the same expression as that which appears in Article 13B(d)(6) of the Sixth Directive, such is not the case in other language versions of that provision, particularly the English, German, Danish and Dutch versions.

56. Moreover, as regards the application of Article 13B(d)(6) of the Sixth Directive to transactions effected between undertakings for collective investment and their participants, any other interpretation of that provision, exempting from VAT the management of undertakings for collective investment constituted under the law of contract or under trust law, and not those constituted under statute, would be contrary to the principle of fiscal neutrality on which, in particular, the common system of VAT established by the Sixth Directive is based, and which precludes economic operators carrying out the same transactions being treated differently in relation to the levying of VAT (see Case C-382/02 Cimber Air [2004] ECR I‑8379, paragraphs 23 and 24, and Case C‑280/04 Jyske Finans [2005] ECR I‑0000, paragraph 39).

57. Next, the content of the meaning of ‘management’ of special investment funds must be considered.

58. In that regard, it must be noted that Article 13B(d)(6) of the Sixth Directive contains no definition of that term.

59. That provision must therefore be interpreted in the light of the context in which it is used and of the aims and scheme of that directive, having particular regard to the underlying purpose of the exemption which it establishes (see, to that effect, Case C-284/03 Temco Europe [2004] ECR I-11237, paragraph 18, and Fonden Marselisborg Lystbådehavn , paragraph 28).

60. First of all, it must be borne in mind that, since the exemptions referred to in Article 13 of the Sixth Directive are exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person, they should be interpreted strictly (see, in particular, Case C-275/01 Sinclair Collis [2003] ECR I-5965, paragraph 23, and Case C-8/01 Taksatorringen [2003] ECR I-13711, paragraph 36).

61. Next, it follows from Article 1(2) of Directive 85/611 that the transactions carried out by UCITS consist in the collective investment in transferable securities of capital raised from the public. With the capital provided by subscribers when they purchase shares, UCITS assemble and manage, on behalf of the subscribers and for a fee, portfolios consisting of transferable securities (see Case C-8/03 BBL [2004] ECR I-10157, paragraph 42).

62. As the Advocate General observed in point 68 of her Opinion, the purpose of the exemption, under Article 13B(d)(6) of the Sixth Directive, of transactions connected with the management of special investment funds is, particularly, to facilitate investment in securities for small investors by means of investment undertakings. Point 6 of that provision is intended to ensure that the common system of VAT is fiscally neutral as regards the choice between direct investment in securities and investment through undertakings for collective investment.

63. It follows that the transactions covered by that exemption are those which are specific to the business of undertakings for collective investment.

64. Therefore, apart from tasks of portfolio management, those of administering undertakings for collective investment themselves, such as those set out in Annex II to Directive 85/611, as amended, under the heading ‘Administration’, which are functions specific to undertakings for collective investment, come within the scope of Article 13B(d)(6) of the Sixth Directive.

65. On the other hand, that provision does not cover the functions of depositary of undertakings for collective investment, such as those set out in Articles 7(1) and (3) and 14(1) and (3) of Directive 85/611. Those functions do not fall under the management of undertakings for collective investment but under the control and supervision of their activities, the aim being to ensure that undertakings for collective investment are managed in accordance with the law.

66. As regards the services performed by a third-party manager in respect of the administrative management of the funds, it should be noted first that, like the transactions exempted under points 3 and 5 of Article 13B(d) of the Sixth Directive (see Case C-2/95 SDC [1997] ECR I-3017, paragraph 32), the management of special investment funds referred to in point 6 of that article is defined according to the nature of the services provided and not according to the person supplying or receiving the services.

67. Next, the wording of Article 13B(d)(6) of the Sixth Directive does not in principle preclude the management of special investment funds from being broken down into a number of separate services which may come within the meaning of ‘management of special investment funds’ in that provision, and which may benefit from the exemption under it, even where they are provided by a third-party manager (see, to that effect, as regards Article 13B(d)(3) of the Sixth Directive, SDC , paragraph 64, and, as regards Article 13B(d)(5) of that directive, Case C‑235/00 CSC Financial Services [2001] ECR I‑10237, paragraph 23).

68. In those circumstances, it follows from the principle of fiscal neutrality that operators must be able to choose the form of organisation which, from the strictly commercial point of view, best suits them, without running the risk of having their operations excluded from the exemption under Article 13B(d)(6) of the Sixth Directive.

70. However, to be regarded as exempt transactions for the purposes of Article 13B(d)(6) of the Sixth Directive, services performed by a third-party manager in respect of the administrative management of the funds must, viewed broadly, form a distinct whole, fulfilling in effect the specific, essential functions of a service described in that same point 6 (see, to that effect, as regards Article 13B(d)(5) of the Sixth Directive, SDC, paragraph 66, and CSC Financial Services , paragraph 25).

71. The services supplied must therefore concern specific essential elements of the management of special investment funds. Mere material or technical supplies, such as the making available of a system of information technology, are not covered by Article 13B(d)(6) of the Sixth Directive (see, to that effect, as regards Article 13B(d)(3), SDC , paragraph 66).

72. Therefore, it must be held that Article 13B(d)(6) of the Sixth Directive is to be interpreted as meaning that the services performed by a third-party manager in respect of the administrative management of the funds come within the concept of ‘management of special investment funds’ in that provision if, viewed broadly, they form a distinct whole, and are specific to, and essential for, the management of those funds.

73. It is for the referring tribunal to establish whether the services in question in the main proceedings meet those criteria.

74. It follows from the foregoing that the reply to the second and third questions must be that Article 13B(d)(6) of the Sixth Directive is to be interpreted as meaning that the concept of ‘management of special investment funds’ referred to in that provision covers the services performed by a third‑party manager in respect of the administrative management of the funds, if, viewed broadly, they form a distinct whole and are specific to, and essential for, the management of those funds. On the other hand, services corresponding to the functions of a depositary, such as those set out in Articles 7(1) and (3) and 14(1) and (3) of Directive 85/611, are not covered by that concept.

Costs

75. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national tribunal, the decision on costs is a matter for that tribunal. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules: