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On 4 May 2006, the European Court of Justice rendered its decision in the « Abbey National » Case (C-169/04). This decision is crucial for the fund industry, in Luxembourg as well as in other EU member States, insofar as it allows us to determine which services provided to an investment fund will be subject to VAT. By only partly following the conclusions of the Advocate General, the Court confirms and at the same time challenges the interpretation that has been given to the notion of investment fund “management” in Luxembourg, while giving an independent Community law meaning to the notion . On this basis, third-party suppliers to whom administrative functions are delegated can continue to benefit from the exemption, but the depositary bank functions no longer fall under the VAT exemption.
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