VATupdate Newsletter Week 02 2025

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FORE!

Every transaction is subject to VAT. Because of this, VAT people can look at all kinds of situations, to see if a VAT-able transaction takes place. The case-law on VAT often can thus be quite surprising or even funny. We all know about the cases before the EU Court of Justice about erotic pole dancers or about bridge not being a sport. It’s these cases that bring a smile to our faces and tell us that we have chosen the right type of tax to worry about.

This week we have another example, involving golf balls in Texas. Picture this: a sunny Texan golf course, the hum of golf carts, and… an unexpected VAT liability? Yes, you heard that right. News emerged this week about a curious legal spat involving a golf course and its “lost and found” golf balls. The course had been diligently retrieving abandoned golf balls, refurbishing them, and reselling them to players. Seems harmless, right? Well, the tax authorities teed up with a different perspective.

Under local tax laws, these “second chance” golf balls could be subject to Sales Tax (the US equivalent of VAT). The argument? The refurbishing process gave the balls “added value.” Cue the outcry from golfers who felt they were already paying enough for their slices and hooks. One wag suggested the tax authorities were trying to “rubber-stamp” a new revenue source—pun very much intended.

While this saga unfolds, it serves as a light-hearted reminder that VAT (or sales tax) can pop up in the most unexpected places. Who knew your weekend golf game could come with a side of fiscal intrigue?

Other news this week: The top 10 European Court of Justice (ECJ) VAT cases. The VATupdate Team always tries to be the first to publish ECJ-cases, as well as the comments and interpretations that other sources may offer. Based on the most visited posts of ECJ cases on VATupdate.com in 2024, we listed the Top 10 cases of 2024. Here’s a sneak peek at this Greatest Hits Compilation:

C-533/22 (Adient) – The court ruled that a company cannot be deemed to have a fixed establishment solely because it is part of a corporate group. This decision has significant implications for multinational companies managing VAT registrations across jurisdictions. That this case was in the Top 3 is therefore not a surprise.
C-537/22 (Global Ink Trade) – The court emphasized the need for proper documentation in cases where additional evidence is missing, or transactions are deemed fictitious. A cautionary tale for businesses in complex supply chains. And a topic that always comes back in the same or slightly different format. The VAT zero-rate is keeping us busy…
C-726/23 (Arcomet Towercranes) – This case questions whether Transfer Pricing Settlement invoices should be classified as a supply of services under VAT law. The implications for transfer pricing arrangements are enormous, and the final decision is eagerly awaited. And it’s also the (surprising?) winner of 2024, so we expect quite some fuss about this case in the coming year(s).

Each of these cases has its own unique flavour, shaping the VAT framework across the EU and beyond. If you’re a VAT enthusiast (yes, we exist), consider this your “must-read” list for this week.

From golf balls in Texas to ECJ cases in Luxembourg-VATupdate has it all. The take-away is that the world of VAT is never dull. Next time you’re on the golf course or mulling over a VAT ruling, remember that tax can be as unpredictable as a rogue drive off the 18th tee. And while we can’t guarantee a hole-in-one with your tax planning, staying informed is the next best thing.

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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