Value-added tax exemption for sports-related services

The central plank of the Value Added Tax Directive is that services performed by tax payers for valuable consideration within the territory of any one of the EU Member States are liable for value-added tax. A selection of services – including those that are closely associated with the practice of sports by non-profit organisations – have been exempted. It was on the scope of said exemption that the European Court of Justice recently handed down a ruling, in response to it having been presented with the question as to whether the fee which a particular (British) golf club charged to non-members for the use of its golf course should be topped up by value-added tax.

Whereas it would not be permissible according to UK legislation to allow the exemption to extend to services provided to non-members by any service supplier operating a dedicated scheme for its own members, the European Court by contrast ruled that the exemption should apply irrespective of membership on condition that the service supplier should have the status of non-profit organisation.

Although the Member States are at liberty to bolt on particular conditions to the granting of exemption, it is not permissible for them to exclude from exemption services such as that of allowing non-members the use of a golf course that comes under the management of a non-profit organisation.