The Court of Justice of the European Union (CJEU) has issued a judgment in the above case which related to whether the letting of a stadium (with other services) to a football club and for only 18 days per year, constituted a letting of immovable property (VAT exempt) or a taxable supply of services.
The taxpayer acquired a football stadium and paid VAT of €1.3 million on the purchase price. It reclaimed the VAT paid on its VAT return but the tax authority in Belgium considered that the taxpayer’s supply was, in fact, predominantly, a letting of the property which was exempt from VAT. As a consequence, the authority considered that the taxpayer was only entitled to reclaim 20% of the input vat incurred on the purchase price and issued assessments for repayment of the VAT, penalties and interest. The CJEU considered that, in the circumstances, the taxpayer was supplying something more than merely the passive letting of the stadium for rent. It also provided services consisting of the provision of access to the sporting facilities including the supervision, management, maintenance and cleaning of those facilities.
According to its previous case law, the court stated that, in the absence of quite exceptional circumstances, services linked to the practice of sport or physical education must, as far as possible, be considered as a whole (ie a single supply). As such, where ‘other’ services are provided in addition to making the facilities available, they are to be regarded as the main service supplied. The Court therefore concluded that as 80% of the value charged to the football club for the use of the stadium was associated with these ‘other’ services, the supply was not to be regarded as an exempt letting of the property, but as a taxable supply of services. Accordingly, the taxpayer was entitled to reclaim the VAT it had paid on the acquisition of the stadium.
The court has made it clear on many previous occasions that strict criteria must apply for a supply to qualify as a ‘leasing or letting of property’. (ie the landlord of property must have assigned to the tenant, in return for rent and for an agreed period, the right to occupy his property and to exclude other persons from it). It is for the national courts of each member state to determine the facts in each case but, in this case, the court considered that the additional services (of supervision, management, maintenance and cleaning) predominated and were not to be regarded as letting.