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AMS pension tax case seen resolved by year-end

UK – The pension taxation case of computer firm AMS Management Systems is expected to be resolved by the end of the year – helped by yesterday’s ruling against Swedish pension tax treatment by the European Court of Justice.

The AMS case concerns the company’s intention to make one of its UK-based, or so-called “sedentary”, staff a member of its Dutch pension fund.

“It should be by the end of this year for AMS,” said Geoffrey Furlonger, a consultant who is co-manager of the European Pensions Group, or PEPGO, with Mercer Human Resource Consulting. PEPGO launched the case a year ago and is paying AMS’s legal fees.

Furlonger said PEPGO is talking to the UK authorities to get approval, now that the legal position has been made clear by the ECJ.

The ECJ yesterday ruled against Sweden’s pension taxation treatment in a case brought by life insurance firm Skandia.

Like the Skandia case, AMS is a test case aiming at freeing up the European pensions market. PEPGO is an association of 20 multinational companies, including Swiss Life and construction company Kvaerner.

Furlonger welcomed the ECJ judgement in the Skandia case as “very encouraging”.

“It’s significant because it relates to static workers,” he said. The Danner case that was resolved in October 2002 had concerned mobile workers.

He wondered how long it would take before test cases were no longer needed. “But when are EU member states going to give in? States need to spontaneously say yes.”

The European Federation for Retirement Provision said it “warmly welcomes” yesterday’s judgement. “The ECJ has further increased pressure on EU member states to stop discrimination unjustifiably against cross-border occupational pension provision. The judgement further paves the way for pan-European pension provision."


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