ECJ rules that Bridge is not a Sport for purposes of VAT Directive

Created on Monday, 27 Nov 2017 19:56:53

On 26 October 2017, the European Court of Justice (ECJ) delivered its judgement on the ‘English Bridge Union (EBU)’ case. The Court stated that the physical aspect of bridge is negligible. It therefore rejected EBU’s claim to fall under the concept of sport and to benefit from the tax-exemption allocated to such activity.

The EBU is the British body accountable for the organisation of ‘duplicate bridge’ tournaments. This variant of bridge consists of a card game where each duo successively plays the same hands as their opponents at the other tables: winning thus implies a relative better performance. This game can be played competitively, even at international level.

When organising a championship, the players have to pay a participation fee, and the EBU has to pay a Value Added Tax on those fees. In 2015, the English Bridge Union made an application for repayment of this tax to the Commissioners for Her Majesty’s Revenue & Customs (i.e. UK’s tax authority). Indeed, they believed that - as a sport - they deserved the tax exemption granted by the VAT Directive (2006/112/EC). Their legal action against the tax authority was rejected since the physical element of this activity was not considered to be significant enough to be tax-exempted.

After receiving the case on appeal, the British Upper Tribunal asked the European court of justice to define the concept of ‘sport’ mentioned in the VAT Directive. In June of this year, ECJ’s Advocate General, Maciej Szpunar gave an encouraging opinion for the EBU. He had recommended that ‘sport’ had to be conceived as the training of mental or physical fitness in a beneficial way for the citizens’ wellbeing. Following this description, bridge - a game that involves logic, memory and anticipation - would be a ‘sport’.

However, a few months later, the ECJ did not agree with this interpretation and strictly limited the concept of ‘sport’ (as mentioned in the VAT Directive) to be activities “characterised by a not negligible physical element”. Although duplicate bridge is favourable for the mental and physical health of its players, it does not imply that it is a sport, even when played competitively. Nonetheless, it is worth noting that the ECJ’s interpretation does not jeopardise bridge’s chance to be covered by the concept of ‘cultural services’ noticed in the same article of the VAT Directive.

FURTHER INFORMATION

ECJ Press Release

ECJ Judgement on the case (C-90/16)

Advocate General Szpunar’s opinion (June)

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