This exemption now also covers management services rendered to securitisation vehicles (as defined under the Securitisation Act) and authorised reinsurance special purpose vehicles (as defined in the Re-Insurance Special Purpose Vehicle Regulations), provided that the services are specific to and essential for the core activity of the vehicles.
The implications of this extension are particularly two-fold:
- Such entities acquiring management services will start to enjoy an 18% reduction in their management costs; and
- The managers of such vehicles will no longer require to charge VAT on the provision of management services however this will affect their right to claim VAT incurred on purchases.
Should you wish to learn more about the particular effect that these changes will have on your business, get in touch!