VAT treatment of an OFP’s Risk Manager : The tax authority confirms the VAT exemption !

The tax authority just confirmed to us that “services provided by an OFP’s “risk manager” benefit from the exemption provided for in Article 44, § 3, 11°, of VAT Code”.

The law of 11 January 2019 relating to the transposition of the European Parliament and the Counsel’s Directive (EU) 2016/2341 of 14 December 2016 concerning institutions for occupational retirement provision (IORP)’s activities and monitoring and amending the law of 27 October 2006 relating to institutions for occupational retirement provision’s control (B.M. 23/01/2019), has created the risk management function or “Risk Manager”, within IORPs.

The person responsible for the risk management function must be actively involved in developing the risk strategy and the implementation of the risk management system as well as in all management decisions with a significant impact on risk. The Risk Manager ensures that the risk management system covers all risks to which the IORP may be exposed and controls the proper application of the risk management system. As for the other key functions referred to in the law of 27 October 2006, it must be an independent (natural of legal) person who may be external to the IORP.

If the organizations for financing pensions (OFP)’s management is exempted from TVA by Article 44, § 3, 11°, VAT Code, the question regularly arises in practice of which services can benefit exactly from this VAT exemption.

Whereas the tax authority considered that for example services provided by an OFP’s internal auditor and compliance officer do not benefit from the VAT exemption provided for in Article 44, § 3, 11°, VAT Code, it just confirmed to us that “services provided by an OFP’s “risk manager” benefit from the exemption provided for in Article 44, § 3, 11°, of VAT Code”.

Action point

Control the VAT treatment applied on your “Risk Manager’s" (future) invoices. They must not include an owed amount of VAT as long as the OFP’s risk management activities benefit from a VAT exemption.