Free article section

You are reading a Free article. Apply for a subscription to access all the valuable information on the website Sports Law & Taxation

AUSTRIA: Decision of ECJ on deduction of input VAT by sports club

A sports club, that was Austrian tax purposes classified as a non-profit-making association, undertook in 1997 the construction of an annexe to its clubhouse. Part of the annexe was intended to be used for sports activities, whilst the other part was to be used as a refreshment bar and leased to a lessee. In its 1997 VAT declaration, the club deducted the input VAT paid in respect of the part of the annexe that was intended to be used as a bar. The Austrian Finanzamt refused these deductions on the ground that a sports club exempt from tax under Para. 6(1)(14) of the Umsatzsteuergesetz 1994 (UStG) without having the right to make deductions and could not, making use of an option right, choose to waive the exemption in respect of turnover resulting from the leasing and letting of immovable property. Hence, in the view of the Austrian tax authorities the individual exemption available to non-profit-making sports club under Para. 6(1)(14) of the UStG took precedence over the exemption of the leasing and letting of immovable property under Para. 6(1)(16) of the UStG. The first issues before the ECJ was whether an EU Member State may exercise its option under Art. 13(C) of the Sixth VAT Directive to allow taxable persons to opt for taxation in respect of the letting of immovable property only in a uniform manner or whether the EU Member State may distinguish by reference to types of transactions or groups of taxable persons. The second issues was whether or not Art. 13(B)(b), in conjunction with Art. 13(C)(a) of the Sixth VAT Directive, permits legislation of the EU Member States, under which the possibility of opting for taxation of leasing and letting transactions is limited in such a way that non-profit-making sports clubs do not have this option. The European Court of Justice (ECJ) gave its decision on 12 January 2006 in the case of Turn- und Sportunion Waldburg v. Finanzlandesdirektion f?r Ober?sterreich (C-246/04). The ECJ held that the EU Member States, when giving their taxable persons the right to opt for taxation under Art. 13(C) of Sixth VAT Directive, may make a distinction by reference to types of transactions or groups of taxable persons provided that they observe the general objectives and principles of the Directive, in particular, the principle of fiscal neutrality and the requirement of correct, straightforward and uniform application of the exemptions. It is for the Austrian national court to determine whether or not national legislation which, by exempting generally the transactions of non-profit-making sports clubs, restricts their right to opt for taxation of leasing and letting transactions exceeds the discretion conferred on the EU Member States.
The Journal

Global Sports Law and Taxation Reports feature: articles; comparative surveys; commentaries on topical sports legal and tax issues and documentation.

The unique feature of Global Sports Law and Taxation Reports is that this Journal combines for the first time up to-date valuable and must-have information on the legal and tax aspects of sport and their interrelationships.

TheĀ Editors

The editors of  the Journal Sports Law & Taxation are Professor Ian Blackshaw and Dr Rijkele Betten, with specialist contributions from the world's leading practitioners and academics in the sports law and taxation fields.

The Editors

Managing editor
Dr. Rijkele Betten

Consulting editor
Prof. Dr. Ian S. Blackshaw

Editorial board

Prof. Guglielmo Maisto
Maisto e Associati, Milano

Dr. Dick Molenaar
All Arts Tax Advisors, Rotterdam

 

Mr. Kevin Offer
Hardwick & Morris LLP, London

Mr. Mario Tenore
Maisto e Associati, Milano

Address

Nolot BV
St. Jorisstraat 11
5211 HA  's-Hertogenosch
This email address is being protected from spambots. You need JavaScript enabled to view it.