CJEU submission on input VAT deductions in the case of health resorts

BFH, resolution of 15 December 2021, XI R 30/19

To clarify the question of whether the operation of health resorts for a spa tax constitutes a commercial activity and that therefore input VAT deductions for associated input supplies must be granted, the BFH has submitted two questions to the CJEU for a preliminary ruling:

  • If, as in the main proceedings, a municipality that levies a “spa tax” due to a local statute (in the amount of a certain amount per day of visit) on visitors staying in
    the community (spa guests) for the provision of spa facilities (for example, a spa park, spa building, pathways), is carrying out, by providing the spa facilities to the spa guests for a spa tax, a commercial activity in line with Art. 2 (1) (c) of the VAT Directive, if the spa facilities are freely accessible for everyone anyway (and therefore, for example, also for residents or others not subject to the spa tax)?
  • If the answer to this question is yes: Is, under the circumstances of the main proceedings mentioned above, in examining whether the treatment of the municipality as not liable for VAT could lead to “significant distortions of competition” in line with Art. 13 (1) (2) of the VAT Directive, in terms of area the relevant market only the area of the municipality?

Source KPMG


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