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THE NETHERLANDS: No Netherlands VAT on transfer fee charged by Netherlands based intermediary

A much debated issue has been whether VAT is due on the transfer fee received by Netherlands intermediary for the transfer of professional soccer players from the Netherlands to abroad (in the two cases at hand to Germany and the United Kingdom). The Netherlands Supreme Court had in its decision of 6 September 2002 (Nr. 37.389) decided that the services of managers of foreign professional football clubs are on the basis of Article 6, paragraph 1 of the Netherlands VAT Act delivered in the Netherlands, and thus Netherlands VAT was due. The Court of First Instance of Haarlem has dealt with the two cases at hand. The tax authorities had upon an audit claimed that the intermediary should have charged VAT on the transfer fees invoiced to a club in Germany and a club in the United Kingdom. This point of view was based on the fact that the tax authorities held that the services were performed for the Netherlands football clubs and also on a decision of the Netherlands Supreme Court, which had held that intermediary services performed by intermediaries based in the Netherlands are for VAT purposes rendered in the Netherlands (decision of 6 September 2002, No. 37.389). The intermediary argued that no Netherlands VAT was due, because the place where the services were performed was according to him abroad. The argument was based on the provision in the Netherlands VAT Act referring to advisors, accountants and lawyers (then Art. 6, 2, d, under 3), and secondarily on the provision referring to the services of intermediaries (then Art. 6a, 3, c) of the VAT Act. The intermediary also referred to the fact that he had hired a lawyer for a substantial part of the work undertaken in relation to the transfer. The Court of First Instance held in the advantage of the intermediary. The Court reasoned that the nature of the services rendered should be decisive, and in the absence of further information the Court based its decision on the wording of the two agreements: one referred to ? scouting and acting as intermediary? and the other to ?mediation in players? (English translation of the German terms ?die Vermittlung des Spielers?). The Court of First Instance held that the decision of the Supreme Court (referred to above) was not applicable because in that the case the Netherlands based intermediary rendered a whole variety of services to the foreign football clubs. Then the Court reasoned that the pertinent activities are not akin to those envisaged in Article 6, 2, d under 3 (advisory persons such as advisors, accountants and lawyers). The Court did reason that the services of the intermediary were covered by those mentioned in Article 6a, 3 c of the VAT Act, and held that case law of the ECJ (Lipjes) was in this case not applicable (because that case law referred to goods and not services).
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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.

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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

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