Keywords
Summary

Keywords

1. Tax provisions Harmonisation of laws Turnover taxes Common system of value added tax Exemptions provided for by the Sixth Directive Exemption for certain services closely linked to sport or physical education supplied by non-profit-making organisations to persons taking part in those activities Exemption for the letting of immovable property Scope General exemption for supply of premises and other facilities for the practice of sport or physical education, including services supplied by profit-making organisations Not permissible

(Council Directive 77/388, Arts 13A(1)(m), and 13B(b))

2. Tax provisions Harmonisation of laws Turnover taxes Common system of value added tax Exemptions provided for by the Sixth Directive Strict interpretation Exemption for the letting of immovable property Services related to the practice of sport Included within exemption Criteria To be determined by the national courts

(Council Directive 77/388, Art. 13)

3. Tax provisions Harmonisation of laws Turnover taxes Common system of value added tax Deduction of input tax Individuals able to rely on provisions laying down the right to deduct read together with the provisions of Articles 2, 6(1) and 13B(b) of the Sixth Directive

(Council Directive 77/388, Arts 2, 6(1), 13B(b), and 17(1) and (2))

4. Tax provisions Harmonisation of laws Turnover taxes Common system of value added tax Exemptions provided for by the Sixth Directive General exemption laid down by a Member State for the supply of premises and other facilities for the practice of sport and physical education Sufficiently serious breach of Community law

(Council Directive 77/388, Art. 13)

Summary

1. Articles 13A(1)(m) and 13B(b) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes preclude national legislation from providing for a general exemption from value added tax for the supply of premises and other facilities and the related supply of accessories or other arrangements for the practice of sport or physical education, including services supplied by profit-making organisations.

By way of exception to the principle laid down in Article 2 of the directive, under which every supply of services effected for consideration by a taxable person is subject to value added tax, the exemption from tax for supplies of services linked to sport or physical education laid down in Article 13A(1)(m) of the Sixth Directive is specifically limited to supplies provided by non-profit-making organisations. It follows that, where such services are supplied by profit-making suppliers, they cannot fall within the scope of the exemption. Furthermore, although in certain circumstances a supply of premises for the practice of sport or physical education may constitute the letting of immovable property and thus fall within the scope of the exemption in Article 13B(b) of the Sixth Directive, providing for a general exemption for all services linked to the practice of sport or physical education without making any distinction, among those services, between those that constitute the letting of immovable property and other services introduces a new category of exemption for which the Sixth Directive does not provide.

( see paras 19, 22-23, and operative part 1 )

2. The terms used to specify the exemptions provided for by Article 13 of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes are to be interpreted strictly, since they constitute exceptions to the general principle that value added tax is to be levied on all services supplied for consideration by a taxable person. As regards the application of the exemption laid down in Article 13B(b) of the Sixth Directive for the leasing and letting of immovable property to the activity of running a golf course, services linked to the practice of sport or physical education must, so far as is possible, be considered as a whole. Account should also be taken of the period of enjoyment of the immovable property, since that is an essential element of a lease. It is for the national court to determine, in the light of those factors, whether the activity concerned may be considered exempt from value added tax under Article 13B(b) of the Sixth Directive.

( see paras 25-28 )

3. The provisions of Article 17(1) and (2) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, laying down the conditions giving rise to, and the scope of, the right to deduct, read together with those of Articles 2, 6(1) and 13B(b), are sufficiently clear, precise and unconditional for an individual to rely on them as against a Member State before a national court.

( see para. 33, and operative part 2 )

4. The implementation of a general exemption from value added tax for the supply of premises and other facilities and for the related supply of accessories or other arrangements for the purposes of the practice of sport or physical education, where no such exemption is to be found in Article 13 of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, constitutes a serious breach of Community law that can render a Member State liable in damages. Given the clear wording of the directive, the Member State concerned was not in a position to make any legislative choices and had only a considerably reduced, or even no, discretion.

( see paras 40, 42, and operative part 3 )