The CJEU has found that Member States have a discretion to determine the scope of the cultural exemption.
The Court of Justice of the European Union (CJEU) has released its judgment in this case concerning the liability of cinema admissions by the British Film Institute (BFI), a non-departmental public body. The taxpayer essentially argued that its supplies were exempt under Article 13A(1)(n) of the Sixth Directive (now Article 132(1)(m) of the VAT Directive) on the basis that it was an eligible body as defined by UK law, and cinema was cultural. The EU law requires
Both the First-tier Tribunal (FTT) and Upper Tribunal (UT) had found for the taxpayer before the Court of Appeal made the reference to the CJEU. In the absence of relevant case law relating to the cultural exemption, the UT relied on cases concerning the ‘sporting exemption’, which exempts “certain services closely linked to sport”. The UT looked in particular at the CJEU decisions in Commission v Spain, Canterbury Hockey and Mesto Zamberk, finding that the CJEU had consistently held that the wording of the sporting exemption did not allow
The CJEU, however, noted that the taxpayer’s interpretation would mean that all cultural services by eligible bodies would be exempt. The CJEU observed that such a widening would be contrary to established case law that requires Article 13A(1)(n) to be interpreted strictly. The CJEU also noted the history of the legislation. The failure to
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