It is in dispute whether the reduced rate applies to the surfing lessons given by the interested party. Giving the opportunity to practice sports within the meaning of item b.3 of Table I belonging to the Turnover Tax Act 1968 (OB Act)?
- The scope coincides with that of category 14 of Annex III to the VAT Directive, which allows Member States to apply the reduced VAT rate to the provision of ‘the right to use sports facilities’. Provisions of Annex III to the VAT Directive, being exceptions to the main rule, should be interpreted strictly and in accordance with the usual meaning of the words in question.
- In paragraph 65 of the Baštová judgment1 , the CJEU considered the following: “The term ‘right to use sports facilities’ must therefore be interpreted as covering the right to use facilities intended for the practice of sport and physical education, as well as the use thereof with that purpose in mind.”
- It follows that there must be accommodation intended for sports and physical education. It follows from the phrase “as well as its use with that purpose in mind” that the granting of the right to use an accommodation other than a sports facility does not fall under the table item, even if that accommodation is used with the purpose of enabling sports practice or physical education in mind. It also follows from that phrase that the reduced rate does not apply if a sports facility is made available for activities other than sports.
- This interpretation is not inconsistent with Supreme Court case law on the scope of the Table Item2. After all, in these judgments, in which the Table Item was successfully invoked, the sporting activities were always performed from accommodations that were themselves intended for the practice of a sport: a riding school, a sports complex and a sailing school with its own marina.
- In the subject case there is no question of the interested party making available a (right of use of a) sports facility. In the Court of Appeal’s opinion, even if it is assumed that the sea containers/units are immovable, which the Court of Appeal leaves open, the sea containers/units cannot be regarded as a sports facility. This is because the units, given their nature and furnishings, are obviously not intended for practicing sports. The fact that the units are used for the purpose of practicing sports does not alter this.
- The interested party also does not have a course exclusively available to it for its lessons; no permit has been issued by the municipality for the area where surfing is allowed, giving the interested party the exclusive right to this piece of beach and water. The fact that the course participants are required to stay between flags placed by the interested party does not make this different because non-course participants are also allowed to sail between the flags. Under these circumstances, it cannot be said that the case of the interested party is similar to the case that led to the Supreme Court ruling August 10, 2007, 43 169, ECLI:NL:HR:2007:AZ3758 (the four-day ruling). In it, the Supreme Court ruled that start and finish, with the associated facilities, which together with a course are reserved for the duration of the practice of sports, can fall under the concept of “sports facilities. Unlike the organizers of the Four Days Marches, the interested party does not have a ‘course’ on the beach that is exclusively at its disposal, so that also in that respect there can be no question of ‘making available’ a sports facility by the interested party.
- The Court finds support for this opinion in the judgment of the ECJ of 22 September 2022, ECLI:EU:C:2022:719, (The Escape Center). In it, the ECJ held that a service consisting of the grant of the right to use the sports facilities of a fitness center and the provision of individual or group guidance may be subject to a reduced rate where that guidance is related to the use of those facilities and is necessary for the practice of sport (…) or where that guidance is ancillary to the right to use those facilities (emphasis added).
- The Court of Appeal is of the opinion that the use of a sports facility for the practice of surfing is not necessary so that the reduced rate does not apply for that reason alone.
- Should this be otherwise, it does not lead to a different judgment because if so, the right to use the sea containers – given their importance to the practice of surfing – is incidental to the practice of surfing.
Source: rechtspraak.nl
