Irish Finance Bill 2022 – VAT Changes for Fund and Investment Management

Management and administration services provided to Irish regulated funds are generally VAT exempt in Ireland. The Finance Bill 2022 extends that exemption for management of regulated funds to undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs) which are authorised by any other EU Member State.

While exemptions are usually thought of as positive in a tax context, the primary impact of this change will be in relation to the VAT recovery position of alternative investment fund managers (AIFMs), investment managers, investment advisors and administrators based in Ireland which are providing VAT exempt management and administration services to non-Irish EU established funds. Previously, AIFMs, managers and administrators providing such services to EU funds outside of Ireland may have treated the provision of such services as taxable services and would generally have been entitled to recover VAT charged to them by reference to those activities. That will no longer be the case once this amendment is enacted, likely from 1 January 2023. The position as regards the provisions of services to non-EU established funds has not changed.

The provisions in Finance Bill 2022 will be reviewed in the Irish legislature during the coming weeks and may be amended further. The final form of Finance Bill 2022 will be known in early December. It is important that investment managers and other companies that may be affected assess the impact of this measure.

If you would like to discuss this measure or the Finance Bill 2022 generally, please get in touch with your usual Maples Group contact or any of the persons listed below.