Guidance: Rental of premises and facilities for sports, VAT

1 Summary

Renting out a property is, as a general rule, a turnover that is exempt from tax liability. However, the exception does not cover short-term letting of premises and facilities for sports. Such rental is instead treated as a sports service.

This means that the service is either taxable at the tax rate of 6 percent or covered by an exemption from tax liability if it is sold by the state, a municipality or a non-profit non-profit association.

In order for a rental of a property to be taxed as a sports service, there are three conditions that must be met

1. it must be the rental of a premises or facility for sports
2. the premises or facility must be used for sports
3. it must be a short-term rental, i.e. something other than a tax-exempt property rental.

In the Tax Agency’s opinion, a simultaneous rental of a sports venue to several tenants can be treated in different ways depending on how the respective agreement looks and other circumstances surrounding the rentals. The rental to a tenant can thus be considered an exempt property rental, while the rental to another tenant must be considered a sports service. This is a difference from what was evident from the preparatory work (prop. 1996/97:10 p. 55).

In order to determine whether the rental should be considered as a property rental that is exempt from tax liability or as a sports service, several different circumstances can be taken into account. The Swedish Tax Agency considers that the following circumstances are important in determining the demarcation.

• the length of the rental period
• the landlord’s presence in the premises
• the calculation of the compensation
• the tenant’s ability to freely dispose of the premises

A combined assessment of these circumstances must be made for each sports venue and for each individual tenant. The length of the rental period is of essential importance, but this circumstance alone is not decisive when assessing whether it is an exempt property rental or a sports service.

In the assessment, one must also take into account whether one of the tenants has a special position in relation to the others. If contract terms or pricing differ significantly between the various tenants, it may be a sign that the services to the various tenants must be assessed in different ways.

Any fixtures included in the rental must normally be considered an integral part of the provision and thus lack their own independent value for an average buyer.

This position statement replaces the position statement with the same name dated 2016-02-01, dnr 131 11634-16/111 . The new position has been developed to be adapted and delineated to position “Opportunity to exercise sporting activities and access to sporting events, value added tax”, 2022-12-21, dnr 8-2056195 . The new stance involves a change in such a way that a premises that lacks special devices or furnishings for sports but which is normally used as a sports venue shall no longer be considered a premises or facility for sports.

2 Question

This position deals with the demarcation between the rental of premises that is normally exempt from tax liability and the taxable short-term rental of a sports venue or a sports facility. The Swedish Tax Agency explains here its view on which circumstances may be relevant to determine whether the rental should be considered an exempt property rental or as a short-term rental for sports practice (hereinafter referred to as sports services).

This position does not deal with the provision of services that give a sportsperson the opportunity to practice sports or physical training through the use of a sports venue or a sports facility. The position statement also does not deal with the provision of services that give a person access to a sporting event. These issues are dealt with instead in position statement “Opportunity to exercise sporting activities and access to sporting events, VAT”, dnr 8-2056195.

3 Applicable law, etc

3.1 National law

Exempted from tax liability include transfer and assignment of leases, tenancies, condominiums, land rights, servitude rights and other rights to real estate (Chapter 3, Section 2 of the Value Added Tax Act [1994:200], ML).

The exception regarding real estate does not cover the short-term letting of premises and facilities for sports (chapter 3, section 3, first paragraph, 10 ML).

The enumerated cases in ch. 3. Section 3 first paragraph ML can be both an exception to the main rule in ch. 3. Section 2 first paragraph ML and clarification of what the main rule does not cover (SOU 1994:88 p. 114).

Turnover of services which means that someone is provided access to a sporting event or the opportunity to practice sporting activities is exempt from tax liability. The exception only applies if the services are sold by the state, a municipality or a non-profit non-profit association (Chapter 3, § 11 a ML).

If the seller is someone else, the turnover is taxable and is subject to the tax rate of 6 percent (chapter 7, section 1, third paragraph, 11 ML).

According to the preparatory work, short-term rental basically refers to all practice of sports or sports for a fee that takes place on premises or at a facility. Examples include the letting of courts for badminton, tennis (regardless of whether the rental is for loose hours or contracts per season), bowling, golf and the letting of a sports hall for gymnastics. Only certain special situations will fall outside the scope of short-term letting, such as when a company or a conference organizer rents for a longer period and to the exclusion of all others a sports facility (not a single track in a larger facility) or sports venue (prop. 1996/97 :10 p. 55).

The fact that sports services are sold to an employer for use by the employees does not mean that a different tax rate than 6% must be applied to the provision (RÅ 2007 ref. 39).

The Court of Appeal has considered that a rental of a sports venue that takes place simultaneously to an association and to other tenants is not an obstacle to some of the rentals being qualified as tax-exempt rentals of real estate. An overall assessment must be made of the company’s services to the tenants according to the rental agreements and other circumstances. The Court of Appeal found that nothing else has emerged than that the tenants have an exclusive right to the rented premises in relation to others who according to law and agreement do not have a corresponding right to use the premises. The fact that the company rents out the sports facilities to several tenants who use the premises at the same time does not therefore prevent certain supplies from being deemed to be exempt from tax liability.

3.2 Union law

Rental of immovable property is exempt from tax liability (Article 135.1 li Council Directive 2006/112/EC on a common system for value added tax, the VAT Directive). The Member States may also decide on further limitations of this exemption for immovable property (Article 135.2 second paragraph of the VAT Directive).

The member states may apply a reduced tax rate on i.a. access to sports events, use of sports facilities and provision of lessons in sports or physical training (Article 98(1) and point 13 of Annex III of the VAT Directive).

In order for it to be a question of letting real estate, all the characteristics that characterize such a transaction must be met. This means that the owner of a building, for rent and for an agreed period, must give a tenant the right to take possession of the property and exclude others from it. The exemption from tax liability regarding property rental must be interpreted restrictively. If any condition is not met, the provision cannot be applied by analogy solely on the grounds that the use of the immovable property in question is most similar to letting (C-55/14, Régie communale autonome du stade Luc Varenne, paragraphs 22 and 23 and the case law cited therein) .

The condition relating to the rental period aims to distinguish property letting, which usually constitutes a relatively passive activity associated with the passage of time and which does not create any significant added value from other activities which are either of an industrial or commercial nature or which are better characterized by the provision of a service provided than only property being made available. Examples include the right to use a golf course, the right to use a bridge against payment of a toll and the right to install cigarette vending machines in a business premises (C-284/03, Temco Europe, paragraph 20).

A tenant’s right to exclusive use of a property may be limited in the agreement with the landlord. The landlord can e.g. reserve the right to regularly visit the rented property. A lease can also refer to certain parts of a property that are to be used together with others. The fact that there are provisions in the agreement that limit the right to use the rented premises in this way does not prevent it from being a question of use that is exclusive in relation to others who cannot, according to law or agreement, assert any right to the rented property (C -284/03, Temco Europe, paragraph 25).

The European Court of Justice has stated that the presence of a landlord in the premises could be indicative of a more active role than is customary in the letting of immovable property. The financial value of various services provided may also be an indication that a transaction as a whole should be qualified as a provision of services, rather than a rental of immovable property. The length of time during which the immovable property is to be used is also important in determining whether a service should be considered a rental of real estate or whether it should instead be classified as the provision of another service. In order for it to be a question of a rental of real estate, the use must not, in principle, be merely temporary or transitory (C-55/14, Régie communale autonome du stade Luc Varenne, paragraphs 31-37).

Leasing a golf course to a player involves not only the passive letting of land, but also the carrying out of a series of commercial activities, such as the ongoing monitoring, administration and maintenance of the facility by the service provider, as well as the provision of other facilities. Only in very special circumstances can such a grant be considered a real estate lease. The European Court of Justice has stated that even such circumstances as the fact that it is a question of a club’s “collective” use of facilities and not of individual players’ access and that the use is recurring, lasting and in principle exclusive during the agreed time can be taken into account in the assessment (C -55/14, Régie communale autonome du stade Luc Varenne, paragraphs 26-27 and the practice cited therein).

It is not absolutely necessary that the rental period be agreed when the contract is entered into. Namely, it is the actual contractual relationship that must be taken into account. During the contract period, the contracting parties can agree to extend or shorten the rental period (C-284/03, Temco Europe, paragraph 22).

A landlord’s compensation that is strictly related to how long the tenant uses the property is what best reflects the passive nature of the tenancy. However, this does not mean that a compensation that is also determined by other elements means that the legal relationship should not be classified as “letting of immovable property” in the sense referred to in the VAT Directive. This applies in particular if it is clear that these other elements are of secondary importance in relation to the part of the compensation that is determined based on the contractual term or when these elements do not constitute compensation for anything other than the provision of the property (C-284/03, Temco Europe, point 23).

With regard to the qualification of the use of sports facilities, the European Court of Justice has stated that the provision must, as far as possible, be qualified based on an overall assessment to determine which are the most important characteristics of the transaction in question (C-150/99 Stockholm Lindöpark point 26 and C-55/ 14 Régie communale autonome du stade Luc Varenne paragraphs 24-25).

Each transaction should normally be seen as separate and independent. A transaction which, from an economic point of view, consists of a single performance must not be artificially divided in such a way as to impair the functioning of the VAT system. It is therefore important to look for the elements characteristic of the transaction in question in order to determine whether the taxable person provides the average consumer with several main separate services or a single service (C-111/05, Aktiebolaget NN, paragraphs 22-23 and where stated practice).

When assessing whether one or more supplies are involved, the content of the rental agreement can be an important indication. Even such circumstances that express the interests of the contracting parties, such as pricing and invoicing methods, can be taken into account to determine the circumstances that are characteristic of the transaction in question. Among other things, it must be examined whether the tenant and the landlord, according to the agreement, primarily wish to rent or lease out a property and only secondarily wish to obtain or provide other services, even if these are necessary for the use of the property (C-42/14, Wojskowa, paragraphs 35- 37).

If a property offered for rental objectively, from an economic perspective, appears as a whole together with associated services, these services together with the rental can be considered to constitute a single supply (C-42/14, Wojskowa, paragraph 42).

4 Assessment

Renting out a property is, as a general rule, a turnover that is exempt from tax liability. However, the exception does not cover short-term letting of premises and facilities for sports. Such rental is instead treated as a sports service.

This means that the service is either taxable at the tax rate of 6 percent or covered by an exemption from tax liability if it is sold by the state, a municipality or a non-profit non-profit association.

In order for a rental of a property to be taxed as a sports service, there are three conditions that must be met

1. it must be the rental of a premises and facility for sports (see section 4.1)
2. the premises or facility must be used for sports (see section 4.2)
3. it must be a short-term rental, i.e. something other than a tax-exempt property rental (see section 4.3)

4.1 Premises or facility for sports

The venue needs to be a sports venue or sports facility for the rental to be considered a sports service. It is not enough that the tenant uses the premises or facility for sports.

The Tax Agency considers that the term “premises and facilities for the practice of sports” refers to premises or facilities that have special devices or special furnishings intended for the practice of sports or physical training.

Examples of premises and facilities for sports that are specially designed for sports are premises with courts for, among other things, badminton, tennis and bowling or sports halls for gymnastics etc. and facilities for golf.

Also premises that are used to organize courses in e.g. pilates and such yoga that are considered sporting activities according to ML may have special devices or special furnishings which mean that it is a matter of premises and facilities for sports practice. A room without such furnishings or devices as e.g. is furnished with whiteboards and folding chairs and which is usually rented out for lectures, however, is not considered to be specially furnished for sports practice. This applies even if it is sometimes rented out to a tenant who organizes courses in e.g. pilates or yoga and even if there are loose furnishings such as pilates balls or yoga mats in the room.

4.2 The use of the premises or facility

For a rental of a sports venue or sports facility to be considered a sports service, it must also be used for sports practice. In the position statement “Opportunity to exercise sporting activities and access to sporting events, VAT”, dnr 8-2056195, it is clear what is meant by exercising sporting activities (sports exercise.)

In the assessment, one must also take into account that different parts of a premises or a facility can be used in different ways. For example, there may be areas or rooms in a sports facility that are used solely for administration, such as club rooms or the like. Since such areas or rooms are not used for sports, renting them out cannot be considered a sports service.

A rental of a sports hall for a concert or an antique fair is not considered a sports service. In the opinion of the Swedish Tax Agency, such a rental can either be considered a passive property rental that is exempt from tax liability or as a taxable provision of a service other than a rental of a property.

A short-term rental of a premises or facility for sports can sometimes be provided in several stages. There is no requirement in ch. 3. Section 3 first paragraph 10 ML that the service must be provided directly to an athlete. This means that the provision may apply if the rental takes place, for example, to a sports association or to a company that rents the premises for the purpose of providing sports services to athletes themselves. Such a rental is then considered a taxable sports service with a reduced tax rate if it is sold by someone other than the state, a municipality or a non-profit association.

4.3 Rental of property or short-term rental of a sports venue

Leasing of property is a concept under EU law, which means that civil law national definitions are irrelevant. The European Court of Justice has defined this concept. The basic characteristics of such a lease are the tenant’s exclusive right to use a property as if he or she were the owner of it, for an agreed period of time, in exchange for compensation. If these criteria are not met, the rental cannot be considered a rental of property.

ML has regulated the exception for properties in the main rule in ch. 3. § 2 ML. In addition, there are a number of listed cases in ch. 3. Section 3 first paragraph ML which entails tax liability. This enumeration partly includes exceptions to the main rule and partly clarifications of what the main rule does not cover.

In the ML, it has been specifically stated that a short-term rental of premises and facilities for sports practice is not covered by the exemption from tax liability regarding real estate. Such a rental is normally considered a taxable sports service with a reduced tax rate.

Corresponding writing is not found in the VAT directive. However, the European Court of Justice has stated that, in order to distinguish property rental that is exempt from tax liability from other activities, the agreement must be assessed with its meaning and application. The exception for property rental is characterized by the fact that the service provided mainly means that premises or spaces in properties are passively made available in return for a certain compensation determined for a certain contractual period. This must be distinguished from services that involve a more active use of the property. Such services are taxable.

The member states also have the right to decide on limitations of the exemption from tax liability for immovable property (Article 135.2 second paragraph of the VAT Directive). According to the Swedish Tax Agency’s view, however, neither the preliminary statements nor the wording of the legal text support that the provision in ch. 3. Section 3 first paragraph 10 ML constitutes such a special limitation for Swedish law of the scope of the exception for the rental of immovable property which was introduced with the support of the VAT directive. The provision in ML can instead be seen as a clarification of what is not covered by the exemption from tax liability regarding real estate.

This means that the practice of the European Court of Justice on what constitutes leasing of immovable property is relevant for drawing the line between exempted immovable property leasing and short-term leasing of premises for sports practice (sports services).

4.3.1 Rental to several

The demarcation between an exempt rental of a property and short-term rental of premises and facilities for sports practice has been expressed in the preliminary works as that only certain special situations will fall outside the scope of application of short-term rental, such as when a company or a conference organizer for a longer period of time and to the exclusion of all others rent a sports facility (prop. 1996/97:10 p. 55).

Since this statement was added, the European Court of Justice has indicated that a lease may refer to all or certain parts of a property to be used together with others. Such a limitation in the right to use the rented premises does not prevent it from being a matter of use that is exclusive in relation to others. This means that a rental of a premises or facility for sports practice to several tenants at the same time can be considered as a rental of property according to ML.

In the Tax Agency’s opinion, a rental of a sports facility to several tenants at the same time can be treated in different ways depending on how each agreement looks like and other circumstances surrounding the rentals. A rental to a tenant can thus be considered an exempt property rental, while the rental to another tenant must be seen as a sports service.

In the light of the EU Court’s practice, the above statements in the preparatory work on the rental of sports facilities (prop. 1996/97:10 p. 55) are no longer relevant.

4.3.2 Demarcation between an exempt rental of property and short-term rental of a sports venue (sports service)

A rental of property that is exempt from tax liability is characterized by the tenant’s exclusive right to use a property as if he or she were the owner of it. In addition, it must be a relatively passive rental that is related to the passing of a certain amount of time.

A sports service, on the other hand, involves a more active use of the property, such that the person providing the service constantly monitors, administers and maintains the facility.

In order to determine whether the rental should be seen as an exempt property rental or as a sports service, several different circumstances can be taken into account. The Swedish Tax Agency considers that the following circumstances are important when drawing the border.

Length of rental period

In the Tax Agency’s opinion, the length of the rental period is of significant importance in determining whether a service should be considered an exempt property rental or whether it should instead be classified as a sports service. In order for the assessment of the length of the rental period to be a question of an exempt property rental, the use of the sports facility must not, in principle, be only temporary or transitory.

When assessing the length of the rental, the terms of the agreement are of course of great importance, partly the term of the agreement and partly the conditions for extension. But the actual useful life must also be taken into account.

A rental can either be agreed as an  uninterrupted rental  (around the clock for a certain period of time) or as a  recurring rental  (e.g. every Monday from 10-11 a.m. for a certain period of time).

• An agreement for an uninterrupted rental where the rental period is not merely temporary or transitory is not normally a sports service. As an example, a rental of a golf facility (courses including clubhouse, driving range, etc.) to a golf club can be mentioned where, according to the agreement, the rental must take place for 6 months with automatic extension if no termination occurs. Such a rental is an indication that it is an exempt property rental (see also example 2 b.)
• If the agreement involves a recurring rental, it is instead an indication that the rental is a short-term rental, i.e. a sports service. As an example, the rental of a football field for two hours a week for a year can be mentioned. Even if the parties have agreed on a recurring rental, there may be situations where one of several tenants has a special position in relation to the others, which means that in practice it is a property rental and not a sports service (see example 4).

The landlord’s presence in the premises

The fact that the landlord is in the premises during the rental period can also be an indication of a more active role than is customary when renting real estate. The presence of a landlord in connection with a short-term property rental can often indicate that it is a question of a different service than a property rental. In these cases, the landlord’s presence aims to administer and monitor the activities in the premises or facility. An example can be mentioned renting a court in a badminton hall where the landlord usually has staff on site.

The calculation of compensation

How the agreed compensation is determined can also be taken into account when assessing whether the provision should be seen as an active or passive rental. If the compensation is strictly related to how long the tenant uses the property, e.g. through a fixed monthly rent, it is an indication of the passive nature of the tenancy (ie an exempt property service).

If the compensation is instead determined in a different way than by a certain amount of time elapsing, e.g. that you pay per time regardless of the time you use the premises or the facility, it may be an indication of a more active provision (ie a sports service).

The tenant’s ability to freely dispose of the premises

Additional circumstances that may indicate that it is the question of property letting that is exempt from tax liability are that the tenant has his own key to the facility and that he can freely dispose of all spaces in the premises and has the opportunity to decide for himself who and how many may be invited into the premises (within the framework of applicable fire safety regulations).

Summary conclusions

A combined assessment of the circumstances stated above must be made for each sports venue and for each individual tenant. It must also be taken into account that a sports facility can have surfaces that are used in different ways. The length of the rental period is of essential importance, but this circumstance alone is not decisive when assessing whether it is an exempt property rental or a sports service. In cases where there is a common interest between the parties in a rental relationship, they have a great opportunity to jointly dispose of the content of the agreement. In such a situation, there is reason to assess the contractual terms and other circumstances in more detail when examining whether the rental should be considered an exempt property rental or a sports service (see example 2 b).

If the parties have agreed on a recurring rental, it must also be taken into account if one (or more) of the tenants has a special position in relation to other tenants. If contract terms or pricing differ significantly between the various tenants, it may be a sign that the services to the various tenants must be assessed in different ways. An example of a difference in contractual terms could be that one of the tenants gets access to all spaces in a room while the others only dispose of a limited area, or that one of the tenants has priority to book the room.

4.4 Equipment rented together with the premises or facility

A lease agreement between the landlord and the tenant may, in addition to the right of disposition to the premises, also include access to fixtures.

If the rental is considered a sports service, i.e. it is an active provision and not a passive property rental, then the property itself has no independent value for the buyer. Even the inventory may be considered to lack an independent value for a buyer of a sports service. This means that all parts are normally included as part of the provision of the sports service. An example is a rental of a tennis court to a sports club where the club gets access to a whole consisting of the premises, all fixtures and other services in the form of e.g. staff on location.

Even in cases where the rental is regarded as an  exempt property rental  , the inventory should be seen as an integral part of the property rental and thus lack its own independent value for an average buyer. In the normal case, the fixtures have a smaller economic value in relation to the property rental and cannot be consumed independently of the property. The Swedish Tax Agency’s view is therefore that the inventories should normally be included as part of the provision of the exempt property rental.

4.5 Examples

Example 1, sports service

AB A owns a tennis hall and rents out tennis courts to associations, private individuals and companies. Among other things, the company has an agreement with a tennis association which means that the association rents three tennis courts every Tuesday and Thursday at 16-19 during a year. The association, in turn, uses the courts for lessons for members of the association. The rent is determined at a fixed price for the whole year, but the association has divided the payments into 10 occasions. AB A has staff on site at the reception during the day. However, the association has its own key and locks the premises when they have finished their business.

The Swedish Tax Agency considers that the length of the rental period is of significant importance when assessing whether it is an exempt property rental or a sports service. In this case, the agreement is indeed entered into for one year, but it is a recurring rental, which should normally be seen as a short-term rental. The landlord also has staff on site during a certain part of the rental. Although the association has a key and it is a question of a fixed remuneration, the Swedish Tax Agency considers that it is a question of a sports service. The sports service is taxable and is taxed at the tax rate of 6%.

Example 2 a, rental of property that is exempt from tax liability

B is a company that is wholly owned by a sports association. B rents a sports facility from a municipality that consists of a gym, premises for group training, changing rooms with showers and saunas, a storage area, a reception and a coffee room for the staff. B has entered into an agreement with the sports association which means that the association gets access to all spaces and all fixtures (ie a sublease). The agreement is valid for 1 year with a 3-month notice period. The association pays a fixed monthly rent for the premises including the fixtures. B has staff who carry out cleaning in the facility, otherwise it is the association’s staff who are at reception, etc. The association has its own key and decides who and how many are allowed to stay in the facility. B has stated that the rental of fixtures constitutes about 10% of the total provision.

The Swedish Tax Agency considers that the length of the rental period is of significant importance when assessing whether it is an exempt property rental or a sports service. In this case, the agreement is entered into for one year and refers to an unbroken lease, which should normally be seen as a lease of property. The association also has its own key and decides itself over the activities in the facility and over who and how many are allowed to stay there. In addition, the compensation has been determined as a fixed monthly compensation. Even if the rental also includes fixtures, these only make up a small part of the total rental. In a combined assessment, the Swedish Tax Agency considers that it is a question of an exempt rental of real estate and that the inventory should be considered an integral part of the real estate rental.

Example 2 b, excepted rental of property – length of rental period

The same conditions as in example 2 a, but the agreement between B and the association applies instead of 1 month.

The Swedish Tax Agency considers that the length of the rental period is of significant importance when assessing whether it is an exempt property rental or a sports service. In this case, the agreement refers to an unbroken rental. When assessing the length of the rental period, one must also take into account whether the rental is only temporary or transitory. In this case, the agreement is concluded for 1 month. However, the parties are in a community of interest and have a common interest in being able to dispose of the contractual terms together. It may also be considered likely that the rental will continue for a longer period of time than the month that was initially agreed upon. According to the Swedish Tax Agency’s opinion, in this case the length of the rental period must be considered more than just temporary or transitory.

In a combined assessment, the Tax Agency considers that the letting to the association should not be affected by the fact that the agreement was only entered into for 1 month. The rental to the association should therefore also be seen in this case as an exempt rental of property.

Example 2 c, letting to several tenants (different assessments for each tenant)

Same conditions as in example 2 a, but B has entered into additional agreements with three companies. These agreements show that the three tenants get access to the gym and changing rooms. The respective tenant may bring in a limited number of people during each weekday between 9 and 15. In addition, the tenants get access to the room for group training for one hour every week. The agreements are valid for 2, 6 and 9 months, respectively, with a 1-month notice period. In all agreements (also in the agreement with the association) it appears that there will be other tenants at the same time in parts of the premises.

In the Tax Agency’s opinion, a rental of a sports facility to several tenants at the same time can be treated in different ways depending on how each agreement looks like and other circumstances surrounding the rentals. This means that the letting to the association should not be affected by the fact that at certain times there are other tenants in the premises at the same time. The rental to the association should therefore also be seen in this case as an exempt rental of property.

Rentals to other tenants are recurring rentals, which should normally be seen as short-term rentals. The Swedish Tax Agency does not consider that the respective tenant can have such a special position that indicates that the letting should be considered as property letting. The sports services are taxable and are taxed at the tax rate of 6%.

Example 3, sports services

D has built an arena. The arena is rented i.a. out to a handball club and a floorball club. The respective agreements run for 1 year. The agreements mean that the clubs have priority to book the arena. The clubs coordinate the bookings for six months at a time. At other times, the arena can be booked by others to be used for sporting events, concerts or fairs. The clubs pay a fixed annual fee for the priority right to book and an hourly fee for the times booked. The clubs book the venue for an average of 14 hours each per week. D has staff on site partly at the reception and partly staff who maintain and clean the premises. The clubs do not have their own key, but decide themselves how many and who are allowed to be present in the arena during the rental.

The Swedish Tax Agency considers that the length of the rental period is of significant importance when assessing whether it is a tax-free property rental or a sports service. In this case, the agreement is entered into for 1 year for each club, but it is not an unbroken rental, but the agreements only give priority to the booking system. The landlord also has staff on site during the rental. The clubs can certainly be said to have a special position in relation to other tenants through the right of first refusal. However, the respective club does not use the facility to such a large extent that this pre-emptive right means that the rental must be considered a property rental. Overall, the Swedish Tax Agency considers that the rental to the clubs should be considered sports services. The sports services are taxable and are taxed at the tax rate of 6%.

Example 4,  letting to several tenants where one tenant has a special position in relation to the others

Company C owns a building that contains partly school premises and partly a sports facility consisting of a gymnasium and changing rooms with showers. The gymnasium is equipped with equipment such as equipment for handball, basketball, floorball and gymnastics. C has entered into two agreements with an independent school. The school premises are rented out with exclusive rights for the independent school and this rental is a tax-free rental of premises. In addition to this rental, the company rents out the sports facility and all equipment. Both agreements are valid for 10 years. The sports facility is rented out with exclusive rights for the school during weekdays from 7am to 5pm. The school pays a fixed monthly rent for the facility including the fixtures. The school has its own key and decides who and how many are allowed to stay in the facility during the rental period. There are also staff employed by the school who carry out cleaning in the sports facility. C also leases the sports facility to two associations according to six-month contracts. A basketball association rents the facility every Thursday 18-20 and a floorball association rents it every Monday 19-21. C has stated that the rental of the equipment constitutes approximately 30% of the total provision regarding the sports facility.

The Swedish Tax Agency considers that the length of the rental period is of significant importance when assessing whether it is an exempt property rental or a taxable sports service. In this case, the agreement with the free school is entered into for 10 years. Admittedly, it is a recurring rental that normally indicates that it is a question of a sports service, but the time during which the rental takes place is not alone decisive. In this case, the independent school has a special position in relation to other tenants. In terms of time, it is mainly the school that has exclusive access to the facility. It is also the school that manages the cleaning of the facility. Payment is made through a fixed monthly rent and the independent school has its own key to the facility and decides for itself who and how many are allowed to stay there. Although the value of the fixtures included in the rental amounts to 30% of the total value, the provision mainly consists of the rental of the facility. In an overall assessment, the Swedish Tax Agency considers that it is a question of an exceptional letting of property and that the fixtures must be considered an integral part of the property letting.

The rental to the associations shall be considered as sports services. These are recurring lettings and there are also no other circumstances that indicate that the letting should be considered as a single-property letting. The sports service is taxable and is taxed at the tax rate of 6%.

Example 5,  rental to several – sports service

A golf club owns a golf facility consisting of an 18-hole course, driving range, changing rooms, reception and club room. The facility (with the exception of the clubroom) is leased to Golf AB. The agreement runs for 15 years and the association is voluntarily liable for tax for this rental.

Golf AB, in turn, leases the facility to athletes and collects fees in the form of annual playing rights fees from the golf club’s members and green fees from others. In addition, Golf AB has entered into an agreement with the golf club which means that the golf club leases back the facility for competitions and courses organized by the club. The agreement is entered into for 15 years and means that the golf club pays a market rent for the occasions when the facility is booked. The rent is calculated by the hour and the facility is booked by the golf club for an average of 10 hours per week. Bookings are usually made before the golf season starts. During competitions, the club gets an exclusive right to the track (but not to other parts of the facility). For courses, the club uses the entire facility together with other athletes. The golf club has its own key to the facility.

The Swedish Tax Agency considers that the length of the rental period is of significant importance when assessing whether it is a tax-free property rental or a sports service. In this case, Golf AB leases the course to the golf club according to an agreement entered into for 15 years. The agreement is designed as a recurring rental, which should normally be seen as a short-term rental. Golf AB also has staff on site during the rental. The golf club has a key and may be considered to have a special position compared to other athletes who use the facility in that they have the right to book the facility and the entire course in advance. However, the club does not use the facility to such a large extent that this right of first refusal means that the rental must be considered a property rental. Overall, the Swedish Tax Agency considers that the rental to the golf club should be considered a sports service.

Other rentals from Golf AB (play rights and green fees) are also taxable sports services.

4.6 Changes in position

This position statement replaces the position statement with the same name dated 2016-02-01, dnr 131 11634-16/111. The new position has been developed to be adapted and delineated to position “Opportunity to exercise sporting activities and access to sporting events, VAT”, 2022-12-21, dnr 8-2056195. The new stance involves a change in such a way that a premises that lacks special devices or furnishings for sports but which is normally used as a sports venue shall no longer be considered a premises or facility for sports.