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ECJ Rules Bridge 'Not Sport' For VAT Purposes

by Ulrika Lomas, Tax-News.com, Brussels

27 October 2017


The European Court of Justice (ECJ) has ruled that the card game of duplicate bridge is not a "sport" for the purposes of the European Union VAT Directive and cannot therefore be exempt as such.

The ECJ reached its decision after finding that the physical element to duplicate bridge was negligible and as a result does not fall under the definition of "sport" for the purposes of the VAT Directive.

The case came to the ECJ after the English Bridge Union (EBU), a national body responsible for regulating and developing duplicate bridge in England, had its application for repayment of VAT on bridge tournament entry fees rejected by the UK tax authority on the ground that, because the activity lacked a significant physical element, it was not a "sport" within the meaning of the VAT Directive.

The EBU lodged an appeal against the decision of the tax authority, which was also rejected. However, stating that duplicate bridge involves the use of high-level mental skills, the Upper Tribunal (Tax and Chancery Chamber) asked the ECJ to clarify whether it constitutes a "sport" within the meaning of the directive.

In its decision, issued on October 26, the ECJ found that under a strict interpretation of the VAT exemptions, "sport" is limited to "activities satisfying the ordinary meaning of that concept, which are characterized by a not negligible physical element."

"While admitting that duplicate bridge involves logic, memory and planning, and may constitute an activity beneficial to the mental and physical health of regular participants, the court finds that the fact that an activity promotes physical and mental health is not, of itself, a sufficient element for it to be concluded that that activity is covered by the concept of 'sport' within the meaning of that same provision," an ECJ statement said.

The judges concluded that an activity such as duplicate bridge has a physical element that appears to be negligible, and therefore "is not covered by the concept of 'sport' within the meaning of the VAT Directive."

However, the ECJ ruling did not preclude member states from regarding duplicate bridge as coming under the concept of "cultural services" within the meaning of the VAT directive.

TAGS: court | tax | value added tax (VAT) | law | United Kingdom | fees | tax authority | education | European Union (EU) | services | VAT case law | Europe | Tax

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