VAT Deduction for Spa Facilities in Municipality A

The input discusses the importance of input tax deduction for spa towns.
Many spa towns levy tourist taxes, spa fees, spa charges, or tourist taxes on (non-local) spa guests as payment for the opportunity to use services of their spa facilities.
The question arises whether and to what extent there is a right to input tax deduction.
The FG Baden-Württemberg initially ruled that a spa town operating spa facilities against a tourist tax is not engaged in entrepreneurial activity.
The BFH asked the ECJ in the appeal proceedings whether the provision of a spa facility constitutes an economic activity even if the facility is accessible to non-tourist tax-paying individuals at any time.
The ECJ denied this, leading to a predictable subsequent decision by the BFH.
The situation is different, however, if the spa facilities can only be used by individuals subject to spa fees.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.