BFH on VAT liability for sports clubs

In its judgment VR 48/20 (VR 20/17) of April 21, 2022, the Federal Fiscal Court (BFH) decided, contrary to its previous case law, that sports clubs should not opt ​​for a general value-added tax obligation based on national law based on the Value Added Tax System Directive (MwStSystRL) derived tax exemption.

The decision of the BFH directly only affects services that sports clubs provide for separate remuneration. However, it is of fundamental importance for VAT taxation in the sports sector. This is based on the fact that, according to the case law of the Court of Justice of the European Union (ECJ) and the BFH, services that sports clubs provide to their members against general membership fees are still taxable, contrary to administrative practice, so that the now denied tax exemption results in a VAT liability . Sports clubs now have to reckon with the fact that the case law also considers their services to be subject to VAT insofar as they provide such services to their members and it is not a sporting event within the meaning of § 4 No. 22 lit. b of the Value Added Tax Act (UStG). The BFH expressly addresses this in its judgment.

Sources:

• datev-magazin.de
• bundesfinanzhof.de

 

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