LONDON (Reuters) – BlackRock is not exempt from paying value added tax (VAT) on part of a service from an outside supplier to help manage its funds, the European Union’s court ruled on Thursday.

The world’s biggest asset manager had argued that it should not have to pay VAT on all the service, as special investment funds are exempt from the tax, but Britain’s tax authority disagreed.

The First Chamber of the Court of Justice ruled on Thursday that a “single supply of management services, provided by a software platform belonging to a third-party supplier for the benefit of a fund management company, which manages both special investment funds and other funds, does not fall within the exemption provided for in that provision.”

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