Netherlands: Court of 's-Hertogenbosch: No low VAT rate of 6% for running training on public roads

On appeal, the Court of 's-Hertogenbosch (Netherlands) has confirmed the decision of the Arnhem Court of First Instance that running training on public roads does not come under the low VAT rate. The street is not considered as a sports accommodation.

An organizer of hard running sessions who had his sales tax return based on applicability of the low VAT rate, received an additional assessment from the tax inspector, who was of the opinion that the general VAT rate should be applied because the training took place on public roads.

The training by the organizer, accessible only to members, always started from a sports facility, where they also finished. The members use the changing rooms, showers and canteen of the accommodation, but the actual training sessions take place on public roads accompanied by a trainer.

The tax authorities felt that the services provided by the organizer could not be regarded as providing opportunities for sport as provided for in Item b.3 of Table I of the VAT Act.

The Arnhem Court of First Instance concluded that the appeal was unfounded, whereafter the organizer went into appealed with the Court of Appeal of ‘s-Hetrogenbosch. This Court subsequently ruled that the appeal was unfounded. The public road was not reserved for the training during the hard running sessions and could therefore not be regarded as a sports facility because the athletes did not have the exclusive use of the running course. The cones used in the training as tools for (interval)training were no demarcation of a certain area or route. The fact that earlier a sailing school with a marina and marked fairways had been classified as a sports facility, did not alter the opinion of the Court.

Source: Court of Appeal of 's-Hertogenbosch MK I, 17 December 2010, No. 09 00228