VATupdate Newsletter Week 48 2023

Working-out

My tennis club is not happy with me. They found out that I’m a VAT specialist, and now they’re blaming me for the increase in prices for tennis lessons.

The background is that, some time ago, the tax authorities have ‘clarified’ the VAT rate for sport-activities. Subject to the reduced rate is the ‘use of sporting facilities.’ Giving lessons is not the same as accommodating the sport. Unless the trainer also provides access to the tennis court. Which is why my tennis trainer increased his prices, applying the standard VAT rate, when the tax authorities announced this on their website.

The application of a reduced rate is always a topic that fuels many discussions and court cases. Specifically on this topic, there have been many questions to the courts. Riding horses in the forest is reduced rate, even though they are not staying at the riding school premises. But they start and end there, and therefore it can still be said that the people riding the horses are using the sporting facilities.

The same applies to kitesurfing and blow-karting on the (public) beach, as well as running groups, where the participants have a fixed place where they gather, and where people are welcomed, receive instructions, can change cloths, get treated (first-aid) for injuries, can go to the toilet, etc.

You can stretch it a bit too far, as the boatowner experienced when he argued that his boat was a sports accommodation, used for facilitating training, instructions, and practicing sailing. The court did not go along with this and compared this situation with ECJ C-432/15 (Baštová), where the ECJ decided that ‘making available’ is not (automatically and always) the same as (only) the ‘use of sporting facilities.’

There is a grey line, and there will always be discussions about this. The same with the qualification of sports as such, which seemed to have been decided in ECJ C-90/16 (The English Bridge Union). ‘No sweat is no sport’, seems to be the conclusion there.

Which brings me to the question: is karaoke a sport? The Dutch court decided that admission to a karaoke bar is not ‘admission to an event’, and therefore is standard rated. However, if I’m doing karaoke, I’m so nervous that I’m sweating a lot. And singing on a stage, even if it’s just playback, involves moving around. And everyone can (must) join, so if you enter the bar, you know you have to ‘exercise’. Could you argue that karaoke is a sport, and going to a karaoke bar is ‘using of sport facilities?’

Probably not, but it’s still nice think about VAT when you’re on that stage. Working-out. Perhaps not (just) physically, but mainly trying to work-out how you ended-up there…

Have a great week!

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