Blog Bas de Koning: A VAT work-out

Sweat

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

The reason? Some time ago, the tax authorities “clarified” the VAT rate for sport activities. The reduced rate applies to the use of sporting facilities. Giving lessons, however, is not the same as accommodating the sport — unless the trainer also provides access to the tennis court. So when the tax authorities published this clarification on their website, my tennis trainer quickly adjusted his prices, applying the standard rate.

The reduced rate is a breeding ground for endless discussions and case law. Take horse riding: walking horses in the forest qualifies for the reduced rate, because the rides begin and end at the stables, so the participants are still considered to be using the sporting facilities.

The same reasoning has been applied to kitesurfing, blow-karting on the public beach, and running groups — as long as there’s a fixed place where participants gather, receive instructions, change clothes, and so on.

But sometimes you pull a muscle. Like the boatowner who tried to argue that his vessel was a sports accommodation. The court disagreed, drawing on ECJ C-432/15 (Baštová): merely “making available” something is not automatically the same as the use of sporting facilities.

I also go mountainbiking every weekend. We always start at the same spot and afterwards go for a coffee. But a restaurant where you drink coffee is not the same as a sports accommodation — even if you can change your clothes and use the toilet there. So my mountainbike trainer charges me the standard rate.

And what about defining sport itself? ECJ C-90/16 (The English Bridge Union) taught us that “no sweat is no sport.” Which leaves me wondering: what about karaoke? I don’t know about you, but when I’m on stage my heart races, I move around, and I sweat profusely. Sounds like sport to me — although a Dutch court wasn’t convinced, deciding karaoke bars don’t count as sporting facilities.

So yes, sweat matters — whether in VAT, karaoke, or tennis. And while the rules may not always be clear, one thing is: next time I’m on court, I’ll be sweating over my backhand instead of over VAT. Though frankly, both are tough to get right. And in both cases, you can give me a call to partner-up.

Source Bas de Koning on taxdirector.nl

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