Brussels, 29 October 2009
In Greece, the supply of services consisting in the provision of bowling facilities is subject to the reduced rate of 9% when such facilities are used by members of clubs of the Hellenic Bowling Federation in the framework of organised sport. However, for facilities for non-member, recreational bowlers, , the normal tax rate applies. Through a reasoned opinion under Article 226 of the EC Treaty, the European Commission has called on Greece to end this selective application of the reduced rate of VAT. If Greece fails to comply with the reasoned opinion, the Commission may bring the matter to the European Court of Justice (ECJ).
The VAT Directive provides that Member States may apply reduced rates to the supply of goods or services set out in its Annex III, which includes, among other things, the use of sporting facilities.
Greece applies a system whereby a reduced VAT rate is only allowed for the provision of bowling facilities to members of clubs of the Hellenic Bowling Federation in the framework of organised bowling competitions or in preparation of these competitions. In doing so, it excludes from the reduced rate bowlers practising this sport outside of such framework.
In its case-law (see inter alia C-109/02), the Court held that the introduction or maintenance of reduced VAT rates is permissible only if they do not infringe the principle of fiscal neutrality, inherent in the common system of VAT, which precludes treating similar goods and supplies of services differently for VAT purposes i.e. those goods or supplies must be subjected to a uniform rate.
The Commission considers that the provision of sports facilities for the practice of bowling is the same service regardless of the affiliation of the bowler to a federation or the context in which the sport is played. First, it is the same bowling facilities that are used. Second, whether bowling is played for recreational purposes or with a competitive goal, it is still a sports activity promoting physical health and involving competition. Therefore, it should be subject to a uniform VAT rate.
Subjective criteria such as the quality or intensity of the play or the personal motivations of bowlers cannot be relied on for the purposes of assessing the similarity of two services, and therefore they cannot justify a distinction made in the VAT treatment of organised and non-organised bowling. The Commission consequently concludes that by applying the above system, Greece has infringed provisions of the VAT Directive on the application of reduced rates.
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